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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
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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.
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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.
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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
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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)
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Chapter 12 - Accounting for Partnerships
40% x $36,000 loss...................................................
$(14,400)
(b)
25% x $36,000 loss...................................................
$ (9,000)
(c)
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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)
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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
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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
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