Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
CHAPTER 12
SOLUTIONS TO PROBLEMS: SET B
PROBLEM 12-1B
(a) Jan. 1 Cash ............................................................ 10,000
Accounts Receivable ................................. 18,000
Inventory ..................................................... 38,000
Equipment ................................................... 35,000
Allowance for Doubtful
(b) Jan. 1 Cash ............................................................ 3,500
Utech, Capital ...................................... 3,500
PROBLEM 12-1B (Continued)
(c) COMMANDER COMPANY
Balance Sheet
January 1, 2017
Assets
Current assets
Cash
($10,000 + $8,000 + $3,500 + $16,000) ... $ 37,500
Accounts receivable
Property, plant, and equipment
Equipment ($35,000 + $18,000) .................. 53,000
Total assets ........................................................ $195,000
Liabilities and Owners’ Equity
Current liabilities
Notes payable ............................................. $ 20,000
Accounts payable ($30,000 + $40,000) ...... 70,000
PROBLEM 12-2B
(a) (1) Income Summary ................................................ 50,000
Riles, Capital ($50,000 X 50%) .................... 25,000
Kinder, Capital ($50,000 X 30%) ................. 15,000
Crifui, Capital ($50,000 X 20%) ................... 10,000
(2) Income Summary ................................................ 43,000
Riles, Capital
(3) Income Summary ................................................ 34,000
Riles, Capital
($4,000 + $20,000 + $2,000) .................... 26,000
Kinder, Capital ($2,500 + $2,000) ................ 4,500
Crifui, Capital ($1,500 + $2,000) .................. 3,500
Net income ................................ $ 34,000
Interest allowance
PROBLEM 12-2B (Continued)
(b)
DIVISION OF NET INCOME
Riles
Kinder
Crifui
Total
Salary allowance ........................
Interest allowance on capital
Total salaries and interest .........
Remaining income, $6,000
Riles
($6,000 X 1/3) .....................
Kinder
($6,000 X 1/3) .....................
$20,000
24,000
2,000
2,500
2,000
(
1,500
$20,000
28,000
(c) RKC COMPANY
Partners’ Capital Statement
For the Year Ended December 31, 2017
Riles
Kinder
Crifui
Total
Capital, January 1 ..............
Add: Net income ..............
$40,000
26,000
$25,000
4,500
$15,000
3,500
$80,000
34,000
PROBLEM 12-3B
(a) NEWMAN COMPANY
Schedule of Cash Payments
Item
Cash
+
Noncash
Assets
=
Liabilities
+
Mallory,
Capital
+
Bosco,
Capital
+
Renteria,
Capital
Balances before liquidation .................
Sale of noncash assets and
allocation of loss ................. (1) + (2)
$30,000)
55,000)
+
+
$70,000)
(70,000)
=
=
$52,500)
+
$28,000)
(7,500)
+
+
$13,650)
(4,500)
$5,850)
(3,000)
PROBLEM 12-3B (Continued)
(b) (1)
Apr. 30 Cash .......................................................... 55,000
Allowance for Doubtful Accounts .......... 2,000
Accumulated Depreciation ...................... 8,000
Noncash assets (net) ............ $70,000
Sale proceeds ....................... 55,000
(2)
30 Mallory, Capital ($15,000 X 50%) ............. 7,500
Bosco, Capital ($15,000 X 30%) .............. 4,500
(3)
30 Notes Payable .......................................... 20,000
Accounts Payable .................................... 30,000
(4)
30 Mallory, Capital ($28,000 – $7,500) ......... 20,500
Bosco, Capital ($13,650 – $4,500) ........... 9,150
PROBLEM 12-3B (Continued)
(c)
Cash
Bosco, Capital
Bal. 30,000
4/30 (1) 55,000
4/30 (3) 52,500
4/30 (4) 32,500
4/30 (2) 4,500
4/30 (4) 9,150
Bal. 13,650
Bal. –0–
Bal. –0–
Mallory, Capital
Renteria, Capital
4/30 (2) 7,500
Bal. 28,000
4/30 (2) 3,000
Bal. 5,850
*PROBLEM 12-4B
(a) (1) Giger, Capital ..................................................... 5,000
Edelman, Capital ........................................ 5,000
(3) Cash ................................................................... 29,000
Younger, Capital ($5,000 X 5/10) ...................... 2,500
Beyer, Capital ($5,000 X 3/10) ........................... 1,500
Giger, Capital ($5,000 X 2/10) ........................... 1,000
Edelman, Capital ........................................ 34,000
Total capital of existing
partnership .................... $56,000
Investment by Edelman .... 29,000
Total capital of new
partnership .................... $85,000
(4) Cash ................................................................... 24,000
Younger, Capital ($8,000 X 5/10) ............... 4,000
Beyer, Capital ($8,000 X 3/10) ................... 2,400
*PROBLEM 12-4B (Continued)
Edelman’s capital credit
($80,000 X 20%) ................ $16,000
(b) Total capital after admission ($25,000 ÷ 25%) ..................... $100,000
Total capital before admission ............................................. 56,000
*PROBLEM 12-5B
(a) (1) Piper, Capital ..................................................... 28,000
Dunlap, Capital........................................... 14,000
Yevak, Capital ............................................ 14,000
(2) Piper, Capital ..................................................... 28,000
Yevak, Capital ............................................ 28,000
(4) Piper, Capital ..................................................... 28,000
Dunlap, Capital ($9,000 X 6/9) ................... 6,000
Yevak, Capital ($9,000 X 3/9) ..................... 3,000
Cash ............................................................ 19,000
(b) (1) Yevak capital after withdrawal....................................... $57,000
Yevak capital before withdrawal ................................... 51,000
Bonus to Yevak .............................................................. $ 6,000
