Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can someone help with this problem? Everything with green check marks are correct. Everything with a red X is incorrect. Thank you! C. Eastwood. A
Can someone help with this problem? Everything with green check marks are correct. Everything with a red "X" is incorrect. Thank you!
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: 9/1 C. Eastwood, Capital 8,800 1/1 5/1 31,380 6,882 3/1 A. North, Capital 10,880 1/1 7/1 9/1 41,888 6,982 5,600 8/1 M. West, Capital 13,200 4/1 6/1 1/1 51,380 8,300 4,280 Required: For each of the following independent Income-sharing agreements, prepare an income distribution schedule. a. Salaries are $16.700 to Eastwood, $20.600 to North, and $18.400 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 $77.910. (Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Answer is complete and correct. Eastwood 3 29,300 $ North 3 42,700S West 4 50,600 Total 10 $ $ Profit ratio Ending capital Net income Salary Bonus Interest on ending capital balance Residual income (deficit) Allocate Total 16,700$ 3.710 2,930 20,600S 0 18,400 0 4,270 5.080 77.910 (55,700) (3.710) (12,260) 6.240 (6.240) 0 $ 1.872 25.212 1,872 26,742 2.496 25,956 $ $ S $ b. Interest is 10 percent of weighted-average capital balances. Salaries are $25,400 to Eastwood, $22,100 to North, and $26.500 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 $70.060. (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.) Answer is complete but not entirely correct. Eastwood North West Total 1 1 1 3 S 32,900 $ 37,3175 54.475 IS 70,000 Profit ratio Average capital Net income Interest on average capital balance Salary Bonus Residual income (deficit) Allocate Total 3.290 25,400 3.731 22.100 4.409 5,447 % (12.488) 26,500 (74,000) (4.409) $ 20,817) (6.939) X 20,817 25,008 S 0 (6.939) 21,751 (8.939) 23.301 IS $ s c. West recelves a bonus of 20 percent of net Income after deducting the bonus and the salaries. Salaries are $21.500 to Eastwood, $19,500 to North and $15.400 to West Interest is 10 percent of beginning capital balances. Eastwood, North and West divide any remainder in an 8:7:9 ratio, respectively. Net Income was $95.700. (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.) Profit ratio Beginning capital Net income Bonus Salary Interest on beginning capital balance Residual income (deficit) Allocate Answer is complete but not entirely correct. Eastwood North West Total 8 7 5 20 S 31,300 $ 41,000$ 51,300 S 95,700 IS (7,300) 7,300 21,500 19,500 15,400 (58,400) 3,130 4.100 5,130 (12,380) s 34,240 7,856 6,874 4.910 (19,840) S 32,486 $ 30,474 $ 18,140 s 14,600 TotalStep by Step Solution
There are 3 Steps involved in it
Step: 1
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