1) Janice Knowles (JK) and Mary Norman (MN)are partners who share income and losses in the ratio of 3:2, respectively. On May 31, their capital balances were: JK $220,000 and MN $150,000. On that date, they agree to admit Samuel Torres (ST) as a partner with a one quarter (1/4) capital interest. ST invests $180,000 in the partnership:

a. What is JKs capital balance after STs admittance?

b. What is MNs capital balance after STs admittance

c. What capital amount is recorded for ST

2) Crystal and Nancy have partnership capital balances of $350,000 and $325,000, respectively. Nancy negotiates to sell her partnership interest to Jessica for $395,000. Crystal agrees to accept Jessica as a new partner.

a. Prepare the partnership journal entry to record this transaction.

3) Mr. Meekes, Mr.Kadeem, and Ms. Roberts agreed to form the Engineering Redesign Partnership. Mr. Meekes agreed to contribute $90,000 cash to the partnership. Mr. Kadeem contributes equipment valued at $5,000 and a building with a fair value of $102,000. Ms. Roberts transfers to the partnership cash of $7,000, accounts receivable of $60,000 and equipment worth $30,000. The partnership expects to collect $55,000 of the accounts receivable.

Instructions

a. Prepare the journal entries to record each partners contribution

b. Calculate the total owners equity amount upon formation of the partnership.

4) The partners of ABCO Carpet Cleaning Services have the following beginning capital balances AB, $80,000 and CO, $120,000. During 2017 the partnership earned net income of $140,000. During the year AB withdrew $40,000 and CO made drawings of $27,000.

Instructions

a. Assume the partnership income-sharing agreement calls for income to be divided with a salary of $45,000 to AB and $25,000 to CO, interest of 15% on beginning capital of each partner, a bonus of 25% on income over $100,000 is to be paid to AB. The remainder is divided 50%-50%. Prepare the journal entry to record the allocation of net income.

b. Compute the partners ending capital balances under the assumption in (a) above

5) DJ and AM Co. reports net loss of $35,000. The partnership agreement provides for annual salaries of $15,000 for DJ and $20,000 for AM and interest allowances of $2,500 to DJ and $3,500 to AM. Any remaining income or loss is to be shared 70% for DJand 30% for AM.

Instructions

a. Compute the amount of net income/loss distributed to each partner at year-end.

b. Prepare the necessary closing entries at year end.