Chapter 12 – Accounting for Partnerships
Problem 12-4A (50 minutes)
Part 1
a)
Feb. 1 Benson, Capital…………………………..…….….…….…...138,000
North, Capital……………………………………………... 138,000
To record admission of North.
b)
**($214,000 – $138,000) x 5/8
e)
Feb. 1 Benson, Capital…………………………..…….….…….…...138,000
Accumulated Depreciation—Equipment………..….. 23,200
Meir, Capital*…………………………………………….… 22,950
Lau, Capital**………………………..….….…….….…… 38,250
Equipment…………………………………………….….… 70,000
12-681
Chapter 12 – Accounting for Partnerships
Problem 12-4A (Concluded)
Part 2
a)
Feb. 1 Cash…………………………………………………………………200,000
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
Benson, Capital ($46,500* x 2/10)..…….…......... 9,300
Lau, Capital ($46,500* x 5/10)……….…….….……. 23,250
Rhodes, Capital…………………………….….…….….. 215,500
To record admission of Rhodes and bonus to old partners.
12-682
Chapter 12 – Accounting for Partnerships
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
* $180,800 + $600,000 – $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
Cogley, Capital ($37,200 x 2/6)……..….….…….….…..12,400
Mei, Capital ($37,200 x 1/6)…………………..….…….…. 6,200
Loss on Sale of Inventory………………………….... 37,200
Problem 12-5A (Concluded)
3.
12-683
Chapter 12 – Accounting for Partnerships
(a) Cash…………………………………………………………………320,000
Loss on Sale of Inventory………………………………….217,200
Inventory……………………………….….…….….……... 537,200
(d) Cogley, Capital ($212,500 – $72,400)……..…….….….140,100
Mei, Capital ($167,000 – $36,200)…………………..…...130,800
Cash*…………………………………….…….….…….…... 270,900
*(180,800 + 320,000+15,600-245,500)
4.
(a) Cash…………………………………………………………………250,000
Loss on Sale of Inventory………………………………….287,200
Inventory……………………………….….…….….……... 537,200
Cash………………………………………………………..…. 245,500
(d) Cogley, Capital*………………………….…….….…….….… 83,034
Mei, Capital**………………………………………………….…102,266
Cash***…………………………..…….….…….….….…… 185,300
*$212,500 – $95,733 – $33,733
**$167,000 – $47,867 – $16,867 ***$180,800 + $250,000 – $245,500
12-684
Chapter 12 – Accounting for Partnerships
PROBLEM SET B
Problem 12-1B (45 minutes)
Preliminary calculations
Plan (a) & Plan (c)
Percentages based on initial investments
Bell = $104,000/$260,000 = 40%
Green = $156,000/$260,000 = 60%
Plan (d)
Interest allowances
Bell = 10% x $104,000 = $10,400
Green = 10% x $156,000 = $15,600
Income (Loss)
Year 1
Sharing Plan
Calculations
Bell
Green
(a)
12-685
Chapter 12 – Accounting for Partnerships
40% x $36,000 loss………………………………….….…….
$(14,400)
(b)
25% x $36,000 loss………………………………….….…….
$ (9,000)
(c)
12-686
Chapter 12 – Accounting for Partnerships
60% x ($36,000 loss + $48,000 salary)…..….…….….
_______
(50,400)
50% x ($36,000 loss + $48,000 salary
+ $26,000 interest)……………….….….…….…..
(55,000)
12-687
Chapter 12 – Accounting for Partnerships
Problem 12-1B (Concluded)
Income (Loss) Year 2
Sharing Plan Calculations Bell Green
(a) 40% x $76,000 income……………………………………….$30,400
60% x $76,000 income………………………………………. $45,600
(d) Salary allowance…………………..….…….….…….….….. $48,000
Interest allowances…………………………….….…….…..$10,400 15,600
50% x ($76,000 income – $48,000 salary
– $26,000 interest)…………………….….…….…. 1,000 1,000
Totals…………………………………………….….….….……...$11,400 $64,600
Income (Loss) Year 3
Sharing Plan Calculations Bell Green
(a) 40% x $188,000 income……………………………………..$75,200
60% x $188,000 income…………………………………….. $112,800
(b) 25% x $188,000 income……………………………………..$47,000
75% x $188,000 income…………………………………….. $141,000
12-688
Chapter 12 – Accounting for Partnerships
Problem 12-2B (50 minutes)
1.
Dec. 31 Income Summary……………………….….…….….….……270,000
Mark Albin, Capital……………………….….…….…... 90,000
Roland Peters, Capital……………..…….….…….…. 90,000
Sam Ramsey, Capital……………..….…….….….….. 90,000
To close Income Summary.
2.
3.
Dec. 31 Income Summary………………….….…….….…….….…..270,000
Mark Albin, Capital……………………….….…….…... 118,800
Roland Peters, Capital…………….…….….…….….. 88,240
Sam Ramsey, Capital……………..….…….….….….. 62,960
To close Income Summary.*
*Supporting calculations Albin Peters Ramsey Total
12-689