PART II

Benji and Arlen decided to start a partnership called BBA Consulting on January $1,2022.$ Each of them

contributed a number of items to the partnership, which are listed below. All tangible assets are listed at their

market value.

Benji

Arlen

On March $1,$ Benji and Arlen added a new partner to the business, Blake. Blake will contribute $$80,000$ and

receive a $29\%$ share of the business. Use the capital balances from January $1$ to determine any bonuses. Assume

the existing partners will split any bonus evenly.

During the year, Benji and Arlen withdrew $$21,400$ and $$16,800$ respectively and the business reported a net

income of $$330,000.$ Their partnership agreement provided for sharing of net income $($loss$)$ on the following

basis:

Salary of $$32,100$ is allocated to Benji, $$29,800$ to Arlen, and $$24,600$ to Blake.

Interest is allocated at $9\%$ of each partner's opening capital balance.

Remainder is shared where Benji gets $32\%,$ Arlen gets $35\%,$ and Blake gets $33\%.$

a$)$ Prepare the journal entries to record the contributions of each partner to start the partnership.

b$)$Prepare a schedule showing the allocation of the net income to the partners.

c$)$ Prepare the journal entries to record the distribution of net income and the closing of the withdrawals accounts. Assume revenues and expenses have been closed to the income summary account.

g$)$ After divding the income for the year, all parties agreed to liquidate the partnership. The values of the assets and liabilities are shown below. The furniture is sold for $$52,320$ and all other assets are sold at their given values. Any gains or losses from liquidation are split evenly among all partners.

Cash $$407,380$

Accounts Receivable $55,000$

Net Equipment $184,600$

Net Furniture $79,320$

Accounts Payable $36,000$

Bank Loan $56,000$

Prepare the journal entries to sell the assets, distribute any gains or losses to the partners, pay the liabilities and distribute the cash to the partners.