Larry, Curly and Moe formed the HydroCarpets partnership on January 1 of the current year. The partners invested assets and liabilities into the partnership as follows: Larry: Cash $ 55,000 Accounts Receivable 20,000 Curly: Land 20,000 Building 180,000 Mortgage payable 95,000 Moe: Cash Office equipment 35,000 25,000 During the first year of business the net income was $141,000. 1) Prepare the journal entries to record the partnership setup 2)Prepare net income allocation using following plans separately. (please note that you need to show me the calculation formula and steps) Plan1: on a 3:3:4 ratio of partnership agreement Plan2: on an original investment ratio respectively Plan3: Interest allowance of 10% on initial investments, salary allowance of $35,000 to Larry, $40,000 to Curly and $45,000 to Moe, with any remaining balance to be shared equally among the three partners 3) Each partner withdrew $30,000 cash from the partnership during the year. Please prepare a statement of partners' capital for the year end December31, based on the net Income Plan2 allocation. Which of the following is not true regarding a partnership? Select one: A. Partnerships pay business income taxes O B. A partnership is a voluntary association OC. General partnership has unlimited liability OD. Partnerships have limited life, the relationship between partners involves mutual agency Larry, Curly and Moe formed the HydroCarpets partnership on January 1 of the current year. The partners invested assets and liabilities into the partnership as follows: Larry: Cash $ 55,000 Accounts Receivable 20,000 Curly: Land 20,000 Building 180,000 Mortgage payable 95,000 Moe: Cash Office equipment 35,000 25,000 During the first year of business the net income was $141,000. 1) Prepare the journal entries to record the partnership setup 2)Prepare net income allocation using following plans separately. (please note that you need to show me the calculation formula and steps) Plan1: on a 3:3:4 ratio of partnership agreement Plan2: on an original investment ratio respectively Plan3: Interest allowance of 10% on initial investments, salary allowance of $35,000 to Larry, $40,000 to Curly and $45,000 to Moe, with any remaining balance to be shared equally among the three partners 3) Each partner withdrew $30,000 cash from the partnership during the year. Please prepare a statement of partners' capital for the year end December31, based on the net Income Plan2 allocation. Which of the following is not true regarding a partnership? Select one: A. Partnerships pay business income taxes O B. A partnership is a voluntary association OC. General partnership has unlimited liability OD. Partnerships have limited life, the relationship between partners involves mutual agency
