Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P-F:12-25A) Allocating profits and losses to the partners, preparing partnership financial statements. Chad, Captital $70,800 On October 1, 2024, Art, Bryce, and Chad formed the
P-F:12-25A) Allocating profits and losses to the partners, preparing partnership financial statements. Chad, Captital $70,800
On October 1, 2024, Art, Bryce, and Chad formed the A, B, and C partnership. Art contributed $20,000; Bryce, $32,000; and Chad, $48,000. Art will manage the store; Bryce will work in the store three-quarters of the time; and Chad will not work in the business.
_Requirements:
1. Compute the partners' shares of profits and losses under each of the following plans:
a) Net loss for the year ended September 30,2025, is $45,000, and the partnership agreement allocates 50% of profits to Art, 40% to Bryce, and 10% to Chad. The agreement does not discuss sharing of losses.
b) Net income for the year ended September 30,2025, is $98,000. The first $35,000 is allocated on the basis of relative partner capital balances. The next $27,000 is based on services, with $17,000 going to Art and $10,000 going to Bryce. Any remainder is shared equally.
c) Use information from 1b, but assume a partnership profit of $48,000.
d) Use information from 1b, but assume a partnership profit of $50,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started