At the end of its first year of operations on December 31, 2020, Pharoah Company's accounts show the following. Partner Art Niensted Greg Bolen Krista Sayler Drawings $23,500 13,900 10,100 Capital 541,200 40,000 26,000 The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2020 has not been closed to the partners' capital accounts. To record the division of net income for the year 2020 under each of the following independent assumptions. 1. Net income is $29,500. Income is shared 6:3:1. 2. Net income is $38,900. Niensted and Bolen are given salary allowances of $15,000 and $10,100, respectively. The remainder is shared equally. 3. Net income is $18,300. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $13,880 salary allowance. The remainder is shared equally. Prepare a schedule showing the division of net income under assumption (3) above. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).) DIVISION OF NET INCOME Art Niensted Greg Bolen Krista Sayler Total Salary allowance $ Interest allowance on capital Total salaries and interest Remaining excess/ deficiency Total division of net income Journalize the entry to record the division of net income for the year 2020 under each of the above independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. + + + 2. + + + Prepare a partners' capital statement for the year under assumption (3) above. (List items that increase partners capital first.) PHAROAH COMPANY Partners' Capital Statement Art Niensted Greg Bolen Krista Sayler Total :: The partners of Wildhorse Company have decided to liquidate their business. Noncash assets were sold for $118,700. The income ratios of the partners Cisneros, Gunselman, and Forren are 3: 2:3, respectively. Complete the following schedule of cash payments for Wildhorse Company. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).) Item Cash + Noncash Assets = Liabilities + Cisneros Capital + Gunselman Capital + Forren Capital Balance before liquidation $14,000 $86,300 $28,200 $22,600 $34,400 $15,100 Sale of noncash assets and allocation of gain New balances Pay liabilities New Balances Cash distribution to partners Final balances $ $
