$40,000
$40,000
E7A. Admission of a New Partner: Recording a Bonus
Total bonus
*Distribution of bonus from original partners:
*Distribution of bonus to original partners:
Total bonus
12-11
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*Distribution of bonus from remaining partners:
E8A. Withdrawal of a Partner
$80,000
Total bonus
12-12
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
1.
Winner, Perry, Gain (or
Other Capital Capital Loss) from
$ 240,000 (320,000) $(80,000)
$ 240,000 —$ 20,000 $ 180,000 $ 120,000 $(80,000)
$ 220,000 —$ 180,000 $ 120,000 $(80,000)
(60,000) (20,000) 80,000
$ 220,000 $ 120,000 $ 100,000 —
— — —
* $80,000 × 0.75 )
$80,000 × 0.25 )
20,000
Winner (
Sale of Assets
E9A. Partnership Liquidation
Distribution of Gain (or Loss) from Realization
Explanation
Perry (
December 31, 2014
Distribution of Cash to Partners
Winner and Perry
Statement of Liquidation
Payment of Liabilities
Balance, December 31, 2014
*
12-13
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Sale of assets
Payment of liabilities
Distribution of the loss
Distribution of cash to the partners
E9A. Partnership Liquidation (Concluded)
12-14
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Abby, Anna, Anita, Gain (or
Other Capital Capital Capital Loss) from
$ 520,000 (960,000) $(440,000)
$ 520,000 —$ 320,000 $ 280,000 $ 80,000 $ 280,000 $(440,000)
$ 200,000 —$ 280,000 $ 80,000 $ 280,000 $(440,000)
(264,000) (88,000) (88,000) 440,000
$ 200,000 $ 16,000 $ (8,000) $ 192,000 —
(6,000) 8,000 (2,000)
$ 200,000 $ 10,000 —$ 190,000
Abby, Anna, and Anita
Statement of Liquidation
July 1, 2014
12-15
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
2. a.
2013 2014
b.
c.
2013 2014
Thomas
be shared equally. This answer is identical to (a).
Thomas
Income shared on the basis of the partners’ original investments.
Because the partners failed to agree on an income-sharing arrangement, income must
Income shared equally
Initial investments of Edi Thomas and
George Lopez
P1. Partnership Formation and Distribution of Income
Problems
12-16
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d.
Income of Partner
Thomas Lopez Distributed
—
Income of Partner
Thomas Lopez Distributed
—
2013 computation:
Interest on investments; remainder shared equally.
Remaining Income
2014 computation:
Remaining Income
Income
Income
P1. Partnership Formation and Distribution of Income (Continued)
12-17
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
e.
Thomas Lopez Distributed
—
Thomas Lopez Distributed
Equal Distribution of Negative Balance
—
Income
Income
Income of Partner
Income of Partner
P1. Partnership Formation and Distribution of Income (Continued)
Remaining Income
2013 computation:
2014 computation:
Salaries allowed; remainder shared equally.
Remaining Income
12-18
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
f.
Income of Partner
Thomas Lopez Distributed
Equal Distribution of Negative Balance
—
Income of Partner
Thomas Lopez Distributed
—
3.
Interest and salaries allowed; remainder shared equally.
2013 computation:
2014 computation:
Remaining Income
P1. Partnership Formation and Distribution of Income (Concluded)
Income
Income
Some factors that should be considered when developing a plan of income sharing among
partners are the talents that each partner brings to the partnership, the relative amounts of
Remaining Income
12-19
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1.
Wilkes Chevron Distributed
—
2.
Wilkes Chevron Distributed
Distribution of Negative Balance
—
3.
Wilkes Chevron Distributed
—
of Partner Loss
Remaining Loss
Income (Loss)
Remaining Income
Income
Income of Partner
P2. Distribution of Income: Salaries and Interest
Income of Partner
Remaining Income
Income
12-20
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.