C. Eastwood, A. North, and M. West are manufacturers' representatives in the architecture business. Their capital accounts in the ENW partnership for 20X1 were as follows: C. Eastwood, Capital 9/1 10,000 1/1 5/ 1 31,800 7 ,400 A. North, Capital 10,600 1/1 3/1 7/1 41,800 5,800 4,600 9/1 8/1 M. West, Capital 13,500 1/1 4/1 6/1 50,400 8,200 4,700 Required: For each of the following independent income-sharing agreements, prepare an income distribution schedule. a. Salaries are $16,300 to Eastwood, $21,400 to North, and $18,200 to West. Eastwood receives a bonus of 5 percent of net income after deducting his bonus. Interest is 10 percent of ending capital balances. Eastwood, North, and West divide any remainder in a 3:3:4 ratio, respectively. Net income was $78,330. (Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Total Eastwood 3/ $ 29,200 $ North 3/ 41,600 $ West 4 49,800 10 $ $ Profit ratio Ending capital Net income Salary Bonus Interest on ending capital balance Residual income (deficit) Allocate 16,300 3,730 2,920 21,400 $ 18,200 010 4,160 4,980 78,330 (55,900) (3,730) (12,060) 6,640 (6,640) 0 $ 1,992 24,942 1,992 27,552 2,656 25,836 Total $ $ $ $ b. Interest is 10 percent of weighted average capital balances. Salaries are $24,500 to Eastwood, $22,000 to North, and $25,600 to West. North receives a bonus of 10 percent of net income after deducting the bonus and her salary. Any remainder is divided equally. Net income was $70,070. (Do not round intermediate calculations. Round the final answers to nearest whole dollar. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Eastwood North West Total Profit ratio Average capital Net income Interest on average capital balance Salary Bonus Residual income (deficit) Allocate Total 0 0 $ 0 $ 0 $ c. West receives a bonus of 20 percent of net income after deducting the bonus and the salaries. Salaries are $22,500 to Eastwood, $19,300 to North, and $15,900 to West. Interest is 10 percent of beginning capital balances. Eastwood, North, and West divide any remainder in an 8:7:5 ratio, respectively. Net income was $96,580. (Do not round intermediate calculations. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Eastwood North West Total Profit ratio Beginning capital Net income Bonus Salary Interest on beginning capital balance Residual income (deficit) Allocate Total 0 $ 0 $ 0 $ C. Eastwood, A. North, and M. West are manufacturers' representatives in the architecture business. Their capital accounts in the ENW partnership for 20X1 were as follows: C. Eastwood, Capital 9/1 10,000 1/1 5/ 1 31,800 7 ,400 A. North, Capital 10,600 1/1 3/1 7/1 41,800 5,800 4,600 9/1 8/1 M. West, Capital 13,500 1/1 4/1 6/1 50,400 8,200 4,700 Required: For each of the following independent income-sharing agreements, prepare an income distribution schedule. a. Salaries are $16,300 to Eastwood, $21,400 to North, and $18,200 to West. Eastwood receives a bonus of 5 percent of net income after deducting his bonus. Interest is 10 percent of ending capital balances. Eastwood, North, and West divide any remainder in a 3:3:4 ratio, respectively. Net income was $78,330. (Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Total Eastwood 3/ $ 29,200 $ North 3/ 41,600 $ West 4 49,800 10 $ $ Profit ratio Ending capital Net income Salary Bonus Interest on ending capital balance Residual income (deficit) Allocate 16,300 3,730 2,920 21,400 $ 18,200 010 4,160 4,980 78,330 (55,900) (3,730) (12,060) 6,640 (6,640) 0 $ 1,992 24,942 1,992 27,552 2,656 25,836 Total $ $ $ $ b. Interest is 10 percent of weighted average capital balances. Salaries are $24,500 to Eastwood, $22,000 to North, and $25,600 to West. North receives a bonus of 10 percent of net income after deducting the bonus and her salary. Any remainder is divided equally. Net income was $70,070. (Do not round intermediate calculations. Round the final answers to nearest whole dollar. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Eastwood North West Total Profit ratio Average capital Net income Interest on average capital balance Salary Bonus Residual income (deficit) Allocate Total 0 0 $ 0 $ 0 $ c. West receives a bonus of 20 percent of net income after deducting the bonus and the salaries. Salaries are $22,500 to Eastwood, $19,300 to North, and $15,900 to West. Interest is 10 percent of beginning capital balances. Eastwood, North, and West divide any remainder in an 8:7:5 ratio, respectively. Net income was $96,580. (Do not round intermediate calculations. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Eastwood North West Total Profit ratio Beginning capital Net income Bonus Salary Interest on beginning capital balance Residual income (deficit) Allocate Total 0 $ 0 $ 0 $
