F. Calvert and G. Powers have capital balances on January 1 of $50,000 and $40,000, respectively. The

Question:

F. Calvert and G. Powers have capital balances on January 1 of $50,000 and $40,000, respectively. The partnership income-sharing agreement provides for

(1) Annual salaries of $20,000 for Calvert and $12,000 for Powers,

(2) Interest at 10% on beginning capital balances, and

(3) Remaining income or loss to be shared 60% by Calvert and 40% by Powers.

Instructions

(a) Prepare a schedule showing the distribution of net income, assuming net income is

(1) $50,000 and

(2) $36,000

(b) Journalize the allocation of net income in each of the situations above.

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...