Brady, Manning and Grossman, sports agents, agree to consolidate their

individual practices as of 1/1/18. The provisions of the partnership

agreement include the following:

1.Each partners capital contribution is the net amount of the assets and

liabilities assumed by the partnership, which are as follows:

Brady Manning Grossman

Cash . . . . . . . . . . . . . . . . . . . . . . . . .$10,000 $10,000 $10,000

Accounts receivable . . . . . . . . . . . . . .28,000 12,000 32,000

Furniture and fixtures . . . . . . . . . . . . 8,600 5,000 12,400

46,600 27,000 54,400

Accumulated depreciation . . . . . . . .(4,800) (3,000) ( 9,400)

Accounts payable . . . . . . . . . . . . . . .( 600) (2,800) (1,400)

(5,400) (5,800) (10,800)

Capital Contribution . . . . . . . . . . . . .41,200 21,200 43,600

Each partner guaranteed the collectibility of their receivables.

2.Grossman had leased office space and was bound by the lease

until 7/31/18; the monthly rental is $1,200. The partners agree

to occupy Grossmans office space until the expiration of the

lease and to pay the rent. On August 1, the partners move to

new quarters with $1,000 monthly rental.

3.The partners receive salaries equal to 20% of the gross fees

billed to their respective clients. The profit and loss ratios are:

Brady, 40%; Manning, 35%; and Grossman, 25%.

On 5/1/18, Marino is admitted to the partnership without any

contribution. Marino is to receive a salary equal to 15% of the

fees his business. The other partners profit and loss ratios

remain relatively the same but is adjusted to allow Marinos ratio

to be 15%.

4.The following information pertains to the partnerships 2018

activities:

a.Fees are billed as follows:

Bradys clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 34,500

Mannings clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43,000

Grossmans clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25,000

Marinos clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31,500

Total $ 134,000

b.Total expenses, excluding depreciation and rent expenses,

are $41,250, including the total amount paid for rent.

Depreciation is computed at the rate of 10% on original cost.

c.Cash charges to the partners accounts during the year are

as follows:

Brady . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 4,100

Manning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6,400

Grossman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3,800

Marino . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7,500

d.Of Bradys and Mannings receivables, $1,150 and $380,

respectively, proved to be uncollectible and were charged

against their capital accounts.

Required:(Any assumptions that you make should be written.)

1.Determine the profit for 2018.

2.Prepare a schedule showing how the profit for 2018 is to be divided.

3.Prepare a statement of the partners capital account for the year ended

12/31/18.

I was out sick for the beginning of this class and I am confused on how to even approach the problem. Please help.