Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

CH12.2 Do In Class Handout Answer the following questions: forton and Long plan to enter into a law partnership, investing $30,000 and $20,000, respectively. They

image text in transcribed
CH12.2 Do In Class Handout Answer the following questions: forton and Long plan to enter into a law partnership, investing $30,000 and $20,000, respectively. They have agreed on e 1) M verything but how to divide the profits. Calculate each partner's share of the profit under each of the following independent assumptions a I the first year's net income is $50,000 and they cannot agree, how should the profits be income divided? b. If the partners agree to share net income according to their investment ratio, how should the $50,000 be divided? c. If the nvestments, giving salary allowances of $10,000 each, and dividing the remainder equally, owners agree to share net income by granting 10 percent interest on their original how should the $50,000 be divided? 2) Assume Morton and Long from Exercise 14.1 use method c to divide profits and net income is $20,000. How should the income be divided? 3) After a number of years, Long, from Exercise 14.1, decided to go with a large law firm and wishes to sell his interest to Brown. Long's equity at this time is $35,000. Morton agrees to take Brown as a partner, and Long sells his interest to Brown for $40,000. Prepare the general journal entry on December 31,20XX to record the sale of Long's interest to Brown. 4) Smith, White, and Saint are partners owning the Book Nook. The equities of the partners are $60,000, $50,000, and $40,000, respectively. They share profits and losses equally. White wishes to retire on May 31,20XX. Prepare the general journal entries to record White's retirement under each independent assumption. a. White is paid $50,000 in partnership cash. b. White is paid $40,000 in partnership cash. c. White is paid $55,000 in partnership cash. 5)Hall and Mason share profits and losses equally and have capital balances of $60,000 and $40,000, respectively. Taylor is to be admitted on January 2, 20xX, and is to receive a one-third interest in the firm. Prepare the general journal entries to record the addition of Taylor as a partner under the following unrelated circumstances a. Taylor invests $50,000. b. Taylor invests $62,000. c. Taylor invests $47,000

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

Step: 3

blur-text-image

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

Auditors Guide To Information Systems Auditing

Authors: Richard E. Cascarino

1st Edition

0470009896, 978-0470009895

More Books

Students also viewed these Accounting questions

Question

7. How does each of these characters achieve epiphany?

Answered: 1 week ago

Question

2. Define identity.

Answered: 1 week ago

Question

1. Identify three communication approaches to identity.

Answered: 1 week ago

Question

4. Describe phases of majority identity development.

Answered: 1 week ago