Problem 11-2A_Allocating partnership profits and losses; sequential years OL03 eXcel CHECK FIGURES: d. Year 1: Phillip: $(86,000); Case: $(14,000); d. Year 2: Phillip: $39,000; Case: $111,000; d. Year 3: Phillip: $89,000; Case: $161,000 Phillip and Case are in the process of forming a partnership to import Belgian chocolates, to which Phillip will contribute one-third time and Case full time. They have discussed the following alternative plans for sharing profit and losses. a. In the ratio of their initial investments, which they have agreed will be $160,000 for Phillip and $240,000 for Case. b. In proportion to the time devoted to the business. c. A salary allowance of $5,000 per month to Case and the balance in accordance with their initial investment ratio. d. A $5,000 per month salary allowance to Case, 15% interest on their initial investments, and the balance equally. The partners expect the business to generate profit as follows: Year 1, $100,000 loss: Year 2. $150,000 profit; and Year 3, $250,000 profit. Required Prepare four schedules with the following column headings: Year Calculations Share to Share to Phillip Case Total Complete a schedule for each of the four plans being considered by showing how the partnership profit or loss for each year would be allocated to the partners. Round your answers to the nearest whole dollar. Problem 11-3A Partnership profit allocation, statement of changes in equity, and closing entries EL02, 03 excel CHECK FIGURES: 1c. Conway: $146,400; Chan: $125,600; Scott: $88,000 Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting by making capital contributions of $245,000, $280,000, and $175,000, respectively. They anticipate annual profit of $360,000 and are considering the following alternative plans of sharing profits and losses: a. Equally: b. In the ratio of their initial investments; or C. Salary allowances of $110,000 to Conway, $85,000 to Chan, and $60,000 to Scott and interest allowances of 12% on initial investments, with any remaining balance shared equally. Page 790 Required 1. Prepare a schedule with the following column headings: Profit/Loss Sharing Plan Share to Conway Share to Chan Share to Scott Calculations Use the schedule to show how a profit of $360,000 would be distributed under each of the alternative plans being considered. 2. Prepare a statement of changes in equity showing the allocation of profit to the partners, assuming they agree to use alternative (c) and the profit actually earned for the year ended December 31, 2020, is $360,000. During the year, Conway. Chan, and Scott withdraw $40,000 $30,000, and $20,000, respectively. 3. Prepare the December 31, 2020, journal entry to close Income Summary assuming they agree to use alternative (c) and the profit is $360,000. Also, close the withdrawals accounts. Problem 11-4A Admission of a partner L04 Help Me SOLVE IT CHECK FIGURES: b. Dr. Zeller, Capital: $8,550; c. Cr. Zeller, Capital: $6,975 Zeller, Acker, and Benton are partners with capital balances as follows: Zeller, $95,000; Acker, $80,000; and Benton, $158,000. The partners share profit and losses in a 3:2:5 ratio. Dent is admitted to the partnership on May 1, 2020, with a 25% equity. Prepare general journal entries to record the entry of Dent into the partnership under each of the following unrelated assumptions: a. Dent invests $111,000 b. Dent invests $73,000 c. Dent invests $142,000 Problem 11-5A Partnership entries, profit allocation, admission of a partner Lo2, 3, 4 CHECK FIGURES: c. Cr. Comeau: $326,980; Cr. Lavoi: $233,020; d. Dr. Lavol: $63,120 On April 1, 2019. Guy Comeau and Amelie Lavoi formed a partnership in Ontario. Comeau Lavoi Contribution $298,000 cash $200,000 land $138,000 building Profit sharing $168.000 salary allowance 5% of original capital investments 5% of original capital investments 40% of remaining 60% of remaining Cash withdrawal March 20, 2020 $118.000 Net Income during the year was $560,000 and was in the Income Summary account. On April 1, 2020 Travis Roberts invested $138,000 and was admitted to the partnership for a 20% interest in equity. Required 1. Prepare journal entries for the following dates: a. April 1, 2019 b. March 20, 2020 c. March 31, 2020 d. April 1, 2020 2. Calculate the balance in each partner's capital account immediately after the April 1, 2020, entry. Problem 11-7A Withdrawal of a partner L04 CHECK FIGURES: d. Dr. Gale, Capital: $18,750; e. Cr. Gale, Capital: $8,531.25 Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows: Gale, $97,000; McLean, $95,000; and Lux, $160,000. The partners share profit and losses in a 3:2:5 ratio. McLean decides to withdraw from the partnership. Prepare general journal entries to record the May 1, 2020, withdrawal of McLean from the partnership under each of the following unrelated assumptions: a. McLean sells his interest to Freedman for $ 181,000 after Gale and Lux approve the entry of Freedman as a partner (where McLean receives the cash personally from Freedman). b. McLean gives his interest to a son-in-law, Park. Gale and Lux accept Park as a partner. c. McLean is paid $95,000 in partnership cash for his equity. d. McLean is paid $ 145,000 in partnership cash for his equity. e. McLean is paid $40,250 in partnership cash plus machinery that is recorded on the partnership books at $ 128,000 less accumulated depreciation of $96,000. 12:24 IN Problem 1184 Liquidation of a partnership los eXcel CHECK FIGURES: Cash to Lut: $79.938, . Cash to Luk 568.625. C Cash to Lue $52,375, d. Cash to Lut $46.000 Lui, Montano, and Johnson plan to liquidate their Premium Pool and Spa business. They have always shared profit and Bosses in a 145 rating and ce the day of the liquidation their balance sheet appeared as follows: Premium Poland Spa Balance Sheet June , 2020 568.750 Machinery SS8790 Less: Accumulated depreciation 451,390 Total assets 5520,000 Liabilities Accounts payable $110.375 Equity Jim Lul $350 Kent Monta, capital 2007 Dave Johnson, capital Total equity 389,625 Total liabilities and equity $520,000 Page 792 Required Part 1 Under the assumption that the machinery is sold and the case is distributed to the proper parties on June 30, 2020, complete the schedule provided below Machinery Ken 12:24 : $ 68.750 Machinery Less Accumulated depreciation 7500 451.250 Total assets $520,000 Accounts payable $130,375 Equity Sim Lui S250 Kent Montave, capital 300.375 Dave Johnson capital Total equity 389,625 Total liabilities and equity $520,000 Page 792 Required Part 1 Under the assumption that the machinery is sold and the cask is stributed to the proper parties on June 30, 2030, complete the schedule provided below. Machinery hen Cash Capital Account balances June 30, 2020 Show the sale, the pain or less allocation. And the distribution of the cash in each of the following unrelated cases a. The machinery is sold for $488.130 b. The machinery is sold for $375,000 c. The machinery is sold for $212.500, and any purthers with reges can und dopyin the amount of their deficits d. The machinery is sold for $187.500, and the partnersther than those invested in the business Part 2