Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P12-20 At the end of its first year of operations on December 31, 2012, the LAX Company's accounts show the following. Journalize divisions of net

image text in transcribed

P12-20 At the end of its first year of operations on December 31, 2012, the LAX Company's accounts show the following. Journalize divisions of net in- come and prepare a partners' capital statement (SO 3, 4) Partner J. Leno L. Arthur J. Xavier Drawings $12,000 9,000 4,000 Capital $33,000 20,000 10,000 (a) (1) Leno $20,000 (2) Leno $14,000 (3) Leno $24,200 The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2012 has not been closed to the partners' capital accounts. Instructions (a) Journalize the entry to record the division of net income for 2012 under each of the follow- ing independent assumptions. (1) Net income is $40,000. Income is shared 5:3:2. (2) Net income is $30,000. Leno and Arthur are given salary allowances of $11,000 and $10,000, respectively. The remainder is shared equally. (3) Net income is $33,000. Each partner is allowed interest of 10% on beginning capital bal- ances. Leno is given an $18,000 salary allowance. The remainder is shared equally. (b) Prepare a schedule showing the division of net income under assumption (3) above. (c) Prepare a partners' capital statement for the year under assumption (3) above. (c) Reno $45,200

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

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

11th Edition

0471448966, 978-0471448969

More Books

Students also viewed these Accounting questions

Question

=1/Define a call or put option.

Answered: 1 week ago

Question

What other publications/presentations does the person have?

Answered: 1 week ago