Question
Assume that there are three sisters in a partnership, A, B, and C. Partner C provides services to the partnership and is entitled to a
Assume that there are three sisters in a partnership, A, B, and C. Partner C provides services to the partnership and is entitled to a salary of $75,000. In addition, assume that the Partnership Agreement provides for an interest allocation of 6% based on the weighted-average Capital Account balance during the year. There is a balance in each Capital Account for Partners A and B of $750,000 for the full year. Partner C, however, was admitted to the partnership for an initial capital contribution of $500,000 on April 30 Finally, assume that the partnership revenues less expenses (other than salary to Partner C and interest on capital balances) are $658,000 and that the Partnership Agreement provides for a sharing ratio of 35%/35%/30% for Partners A, B, and C, respectively. Prepare a schedule for the allocation of profit to the partners.
Display keyboard shortcuts for Rich Content Editor
Step by Step Solution
3.43 Rating (143 Votes )
There are 3 Steps involved in it
Step: 1
Solution Solution partnes A parothes B Paotney C Total Net income before ded...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started