How to solve Accounting for partnerships? Like how to follow the steps of the proposals using journal entries and etc...?
Roquest odit access Shund Joy de Edit View Tools Help and withdrawals by each of them. Joy has withdrawn more from the partnership than Alyssa has over the five years. Their current capital balances are: $220 000 Alyssa $315 000 Jay put forward two proposals to attempt to solve the problem. Proposal 1 The following is a summary of the first option of a new proposed income ratio a. The fixed salary allowance would be changed, Joy and Alyssa would receive $35 000 and $50 000, respectively b. Interest of 6% would be allowed on the capital balances at the beginning of each year. The fiscal year of the partnership ends on December 31 of each year, c. Any excess profits would be split equally Proposal 2 The following is a summary of the second option of a new proposed income ratio: a. There would be no fixed drawings, and the profits would be based solely on a percentage. Joy would receive 40% and Alyssa would receive 60% of the net incomeloss Alyssa has asked for your advice on the proposals and has suggested that net income for the next three years should be $90 000, $150 000 and $200 000 "(this is for both proposals)" Required Prepare a one page summary (max, which includes calculations) that compares the two scenarios and provides a recommendation on which proposal makes more sense for both Alyssa and the partnership The format of the summary should be as follows: 1. Decision on proposal 1 or 2. 2. Reasons (include calculations/schedules) that compare the two proposals and how this differs from the original agreement: 3. Explanation as to why it is best for both Alyssa and the partnership (IT Connections) 4. Short Conclusion (what you recommended and proved). See rubric on the next page Case fac provided by union or Joy You, yes you are an accountant with Debits and Credits, LLP, a small accounting firm. Alyssa approaches you for some advice about a partnership. Five years ago, Joy and Alyssa formed a partnership which operated under the name IT Connections. Their capital contributions were $100 000 each. They shared profits based on a fixed drawings and percentage method. Joy's fixed drawings were $25 000 and Alyssa's were $35 000. Any excess profits or any losses were divided equally between the two partners Alyssa has expressed displeasure with the way profits and losses are being divided. The agreement does not take into consideration their capital balances, which have changed because of investments and withdrawals by each of them. Joy has withdrawn more from the partnership than Alyssa has over the five years. Their current capital balances are: $220 000 Alyssa $315 000 Joy put forward two proposals to attempt to solve the problem. Proposal 1 The following is a summary of the first option of a new proposed income ratio a. The fixed salary allowance would be changed, Joy and Alyssa would receive $35 000 and $50 000, respectively b. Interest of 6% would be allowed on the capital balances at the beginning of each year. The fiscal year of the partnership ends on December 31. of each year, c. Any excess profits would be split equally. Proposal 2 The following is a summary of the second option of a new proposed income ratio: a. There would be no fixed drawings, and the profits would be based solely on a percentage. Joy would receive 40% and Alyssa would receive 60% of the net income/loss Alyssa has asked for your advice on the proposals and has suggested that net income for the next three years should be $90 000, $150 000 and $200 000 this is for both proposals), Required Prepare a one page summary (max, which includes calculations) that compares the two scenarios and provides a recommendation on which proposal makes more sense for both Alyssa and the partnership The format of the summary should be as follows
