Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At the end of its first year of operations on December 31, 2020, Crane Companys accounts show the following. Partner Drawings Capital Art Niensted $23,500

At the end of its first year of operations on December 31, 2020, Crane Companys accounts show the following.

Partner

Drawings

Capital

Art Niensted $23,500 $44,300
Greg Bolen 13,900 31,000
Krista Sayler 10,300 29,000

The capital balance represents each partners 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 $30,700. Income is shared 6:3:1.
2. Net income is $39,400. Niensted and Bolen are given salary allowances of $15,400 and $10,500, respectively. The remainder is shared equally.
3.

Net income is $18,900. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $14,470 salary allowance. The remainder is shared equally.

DIVISION OF NET INCOME

Art Niensted

Greg Bolen

Krista Sayler

Total

Salary allowance

$enter a dollar amount

enter a dollar amount

enter a dollar amount

$enter a total for the row

Interest allowance on capital

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a total for the row

Total salaries and interest

enter a subtotal of the two previous amounts

enter a subtotal of the two previous amounts

enter a subtotal of the two previous amounts

enter a subtotal of the two previous amounts

Remaining excess/ deficiency

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a total for the row

Total division of net income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Routledge Companion To Fair Value In Accounting

Authors: Gilad Livne

1st Edition

0367656132, 9780367656133

More Books

Students also viewed these Accounting questions