735
Problem 12-5A (50 minutes)
Part 1
a)
Feb. 1
Benson, Capital ………………………………………………..
138,000
Feb. 1
Benson, Capital ………………………………………………..
138,000
Feb. 1
Benson, Capital ………………………………………………..
138,000
Feb. 1
Benson, Capital ………………………………………………..
138,000
Meir, Capital* ……………………………………………………
e)
Feb. 1
Benson, Capital ………………………………………………..
138,000
Accumulated Depreciation—Equipment ……………
736
Problem 12-5A (Concluded)
Part 2
a)
Feb. 1
Cash ………………………………………………………………..
200,000
b)
Feb. 1
Cash ………………………………………………………………..
145,000
c)
Feb. 1
Cash ………………………………………………………………..
262,000
737
Problem 12-6A (75 minutes)
Note: All entries in this problem are dated May 31.
1.
2.
738
Problem 12-6A (Concluded)
3.
(a)
Cash ………………………………………………………………..
320,000
217,200
108,600
Cash ………………………………………………………………..
(c)
245,500
140,100
130,800
4.
(a)
Cash ………………………………………………………………..
250,000
287,200
143,600
(c)
245,500
102,266
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
PROBLEM SET B
Problem 12-1B (30 minutes)
Cash ………………………………………………………………………………
200
Supplies …………………………………………………………………………
600
Equipment ……………………………………………………………………..
740
Problem 12-2B (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 (b)
Percentages based on time
Bell = 0.333/1.333 = 25%
Green = 1.000/1.333 = 75%
Plan (c) & Plan (d)
Salary allowance
Green = 12 x $4,000 = $48,000
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)
40% x $36,000 loss ……………………………………………
$(14,400)
60% x $36,000 loss ……………………………………………
25% x $36,000 loss ……………………………………………
75% x $36,000 loss ……………………………………………
(c)
Salary allowance ………………………………………………
40% x ($36,000 loss + $48,000 salary) ………………..
60% x ($36,000 loss + $48,000 salary) ………………..
Totals ……………………………………………………….
Salary allowance ………………………………………………
Totals ……………………………………………………….
741
Problem 12-2B (Concluded)
Income (Loss)
Year 2
Sharing Plan
Calculations
Bell
Green
(a)
40% x $76,000 income ………………………………………
$30,400
60% x $76,000 income ………………………………………
25% x $76,000 income ………………………………………
$19,000
75% x $76,000 income ………………………………………
(c)
Salary allowance ………………………………………………
$11,200
Totals ……………………………………………………….
$11,200
Salary allowance ………………………………………………
$10,400
Income (Loss)
Year 3
Sharing Plan
Calculations
Bell
Green
(a)
40% x $188,000 income …………………………..
$75,200
60% x $188,000 income …………………………..
$112,800
25% x $188,000 income …………………………..
$47,000
75% x $188,000 income …………………………..
$141,000
(c)
Salary allowance ………………………………………………
$ 48,000
$56,000
Totals ……………………………………………………….
$56,000
$132,000
Salary allowance ………………………………………………
$10,400
742
Problem 12-3B (50 minutes)
1.
Dec. 31
Income Summary ……………………………………………..
270,000
Andy Albin, Capital ……………………………………..
Paris Peters, Capital ……………………………………
Ram Ramsey, Capital ………………………………….
2.
Dec. 31
Income Summary ……………………………………………..
270,000
Andy Albin, Capital ……………………………………..
135,000
Paris Peters, Capital ……………………………………
Ram Ramsey, Capital ………………………………….
($164,000/$328,000) x $270,000 = $135,000
($98,400/$328,000) x $270,000 = $81,000
3.
Dec. 31
Income Summary ……………………………………………..
270,000
Andy Albin, Capital ……………………………………..
118,800
Paris Peters, Capital ……………………………………
Ram Ramsey, Capital ………………………………….
62,960
*Supporting calculations
Albin
Peters
Ramsey
Total
Net income …………………………………………
$270,000
Salary allowances
Peters ……………………………………………..
$72,000
Total salaries ……………………………………..
Interest allowances
Albin (10% on $164,000) ……………………
Ramsey (10% on $65,600) …………………
6,560
Bal. after interest and salaries ……………..
Balance allocated equally ……………………
6,400
Balance of income …………………………..
$ 0
743
Problem 12-4B (30 minutes)
Part 1
Income (Loss)
Sharing Plan
Calculations
Cook
Jing
Schwartz
Total
$240,000/3 ……………………………………………
$ 80,000
Total allocated …………………………..
(c)
Net income …………………………………………..
$240,000
Salary allowances …………………………..
$ 30,000
(150,000)
Balance of income…………………………..
Interest allowances
Total interest …………………………..
Balance of income…………………………..
Balance allocated equally……………………..
Balance of income…………………………..
$ 0
744
Problem 12-4B (Concluded)
Part 2
CJS PARTNERSHIP
Statement of Partners’ Equity
For Year Ended December 31
Cook
Jing
Schwartz
Total
Beginning capital balances ……………..
$ 0
$ 0
$ 0
$ 0
Plus
Investments by owners …………………..
Net income
Part 3
Dec. 31
Income Summary ……………………………………………..
87,600
Cook, Capital ……………………………………………………
18,000
38,000
Schwartz, Capital ……………………………………………..
24,000
745
Problem 12-5B (50 minutes)
Part 1
a)
Apr. 30
Gibbs, Capital …………………………………………………..
606,000
Brady, Capital ……………………………………………..
b)
Apr. 30
Gibbs, Capital …………………………………………………..
606,000
Kannon, Capital……………………………………………
c)
Apr. 30
Gibbs, Capital …………………………………………………..
606,000
Cash …………………………………………………………..
d)
Apr. 30
Gibbs, Capital …………………………………………………..
606,000
Hook, Capital* …………………………..…………………….
Chan, Capital** ……………………………………………
Cash …………………………………………………………..
e)
Apr. 30
Gibbs, Capital …………………………………………………..
606,000
Accum. Deprec.—Manufacturing Equipment ……..
336,000
Hook, Capital*……………………………………………..
Chan, Capital** ……………………………………………
Manufacturing Equipment …………………………..
Cash …………………………………………………………..
746
Problem 12-5B (Concluded)
Part 2
a)
Apr. 30
Cash ………………………………………………………………..
300,000
b)
Apr. 30
Cash ………………………………………………………………..
196,000
Hook, Capital ($83,200* x 1/10) …………………………..
Chan, Capital ($83,200* x 4/10) …………………………..
c)
Apr. 30
Cash ………………………………………………………………..
426,000