6 14.28 points eBook Ask Print References Kimble, Sykes, and Gerard open an accounting practice on January 1, 2019, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because oftheir years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $213,000, $182,500, and $94,500, respectively. An articles of partnership agreement is drawn up stipulating the following: . Personal drawings are allowed annually up to an amount equal to 10 percent ofthe partner's beginning capital balance for the year. . Profits and losses are allocated according to the following plan: 1. Each partner receives an annual salary allowance of $55 per billable hours worked. 2. Interest is credited to the partners' capital accounts at the rate of12 percent ofthe beginning capital balance for the year. 3. Kimble and Sykes are eligible for an annual bonus of10 percent of net income after subtracting the bonus, salary allowance, and interest. The agreement also states that there will be no bonus if there is a net loss or if salary and interest result in a negative remainder of net income to be distributed. 4. Any remaining partnership profit or loss is to be divided evenly among all partners. On January 1, 2020, the partners admit Nichols to the partnership. Nichols contributes cash directly to the business in an amount equal to a 25 percent interest in the book value ofthe partnership property subsequent to this contribution. The partnership prot and loss sharing agreement is not altered upon Nichols' entrance into the firm; the general provisions continue to be applicable. The billable hours for the partners during the first three years of operation follow: 2019 2020 2021 Kimble 1,820 1,800 1,880 Sykes 1,560 1,500 1,620 Gerard 1,420 1,380 1,310 Nichols 0 1,560 1, 550 , The partnership reports net income (loss) for 2019 through 2021 as follows: 2019 5 285,000 2020 (12, 700) 2021 480,000 ' 6 14.28 3. Prepare schedules that allocate each year's net income to the partners. b. Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2021. points _ 9 Answer ls not complete. Complete this question by entering your answers in the tabs below. Req A 2019 Req A 2020 Req A 2021 Req B Prepare schedules that allocate for 2021 net income to the partners. (Do not round intermediate calculations. Round your answers to the nearest dollar amounts.) Net income as 480,000 9 Salary allowance $ 103,4009 $ 89,100 9 $ 72,050 9 $ 85,2509 (349,800) Interest 35,021 9 27,483 9 14,762 9 25,755 0 (103,021) Bonus 2471 Q o 9 0 9 (2,471) Remaining net income 15 24,708 (16,680) $ 138,421 $ Total allocation $ 116,565 a. Prepare schedules that allocate each year's net income to the partners. b. Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2021. 14.28 points 6 Answer is not complete. Complete this question by entering your answers in the tabs below. Req A 2019 Req A 2020 Req A 2021 Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2021. (Amounts to be deducted should be indicated with minus sign. Do not round intermediate calculations. Round your answers to nearest dollar amounts.) Beginning balances $ 291,8409 $ 229,029 $ 123,013 9 $ 214,625 9 $ 858,500 Prot allocation 146,451 6 124,613 9 92,371 9 116,565 0 480,000 Drawings (29,184) 9 (22,902) 9 (12,301) 9 (21 ,463) 9 (85,850) Ending Balances $ 409,107 $ 330,733 $ 203,083 $ 309,727 $1,252,650