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Problem 12-1A (Concluded)
Income (Loss) Year 2
Sharing Plan Calculations Watts Lyon
(a) 40% x $90,000 income............................................$36,000
60% x $90,000 income............................................ $54,000
(b) 33 1/3% x $90,000 income......................................$30,000
66 2/3% x $90,000 income...................................... $60,000
Income (Loss) Year 3
Sharing Plan Calculations Watts Lyon
(a) 40% x $150,000 income..........................................$60,000
60% x $150,000 income.......................................... $ 90,000
Problem 12-2A (50 minutes)
1.
Dec. 31 Income Summary....................................................249,000
Kara Ries, Capital.............................................. 83,000
2.
Dec. 31 Income Summary....................................................249,000
Kara Ries, Capital.............................................. 62,250
3.
Dec. 31 Income Summary....................................................249,000
Kara Ries, Capital.............................................. 79,000
Tammy Bax, Capital.......................................... 72,200
Joe Thomas, Capital......................................... 97,800
To close Income Summary*.
*Supporting calculations Ries Bax Thomas Total
Net income................................................... $249,000
Problem 12-3A (40 minutes)
Part 1
Income (Loss)
Sharing Plan Calculations Bill Bruce Barb Total
(b) $450,000 x ($67,500/$750,000).........................................
40,500
(c) Net income................................................................... $450,000
Salary allowances........................................................$ 80,000 $ 60,000 $ 90,000 (230 ,000)
Balance of income....................................................... 220,000
Interest allowances
Problem 12-3A (Concluded)
Part 2
BBB PARTNERSHIP
Statement of Partners' Equity
For Year Ended December 31
Bill Bruce Barb Total
Beginning capital balances..............$ 0 $ 0 $ 0 $ 0
Plus
Investments by owners..................67,500 262,500 420,000 750,000
Net income
Salary allowances......................... 80,000 60,000 90,000
Part 3
Dec. 31 Income Summary....................................................209,000
Bill Beck, Capital............................................... 67,550
Dec. 31 Bill Beck, Capital.....................................................34,000
Bruce Beck, Capital................................................48,000
Problem 12-4A (50 minutes)
Part 1
a)
Feb. 1 Benson, Capital.......................................................138,000
b)
Feb. 1 Benson, Capital.......................................................138,000
c)
Feb. 1 Benson, Capital.......................................................138,000
d)
Feb. 1 Benson, Capital.......................................................138,000
e)
Feb. 1 Benson, Capital.......................................................138,000
Accumulated Depreciation—Equipment............... 23,200
Meir, Capital*..................................................... 22,950
Problem 12-4A (Concluded)
Part 2
a)
Feb. 1 Cash.........................................................................200,000
Rhodes, Capital*............................................... 200,000
To record admission of Rhodes.
b)
Feb. 1 Cash.........................................................................145,000
Meir, Capital ($41,250* x 3/10)................................ 12,375
Benson, Capital ($41,250* x 2/10)........................... 8,250
c)
Feb. 1 Cash.........................................................................262,000
Meir, Capital ($46,500* x 3/10)........................... 13,950
Problem 12-5A (75 minutes)
Note: All entries in this problem are dated May 31.
1.
(a) Cash.........................................................................600,000
Inventory............................................................ 537,200
Gain on Sale of Inventory................................. 62,800
(b) Gain on Sale of Inventory.......................................62,800
(c) Accounts Payable...................................................245,500
Cash................................................................... 245,500
2.
(a) Cash.........................................................................500,000
Loss on Sale of Inventory......................................37,200
Inventory............................................................ 537,200
(b) Kendra, Capital ($37,200 x 3/6)...............................18,600
(d) Kendra, Capital ($93,000 - $18,600)........................74,400
Problem 12-5A (Concluded)
3.
(a) Cash.........................................................................320,000
(b) Kendra, Capital ($217,200 x 3/6).............................108,600
Cash......................................................................... 15,600
(c) Accounts Payable...................................................245,500
(d) Cogley, Capital ($212,500 - $72,400)......................140,100
4.
(a) Cash.........................................................................250,000
(b) Kendra, Capital ($287,200 x 3/6).............................143,600
Cogley, Capital ($50,600 x 2/3)............................... 33,733
(c) Accounts Payable...................................................245,500
(d) Cogley, Capital*....................................................... 83,034
(a) Cash.........................................................................250,000
Loss on Sale of Inventory......................................287,200
