Question 12-2A

Excel Spreadsheet Template Computing partners' shares of net income and met loss 3 Required 1. Journalize the partners' initial investments 2. Prepare the partnership balance sheet immediately after its formation on January 1, 2017 3. Calculate the partners' Capital balances on December 31, 2017 Problem 12-2A Sheila Sasso, Karen Schwimmer, and Jim Perry have formed a partnership. Sasso invested 560,000. Schwimmer 5120,000, and Perry $180,000 Sasso will manage the store, Schwimmer will work in the store three-quarters of the time, and Perry will not work in the business. Required 1. Compute the partners' shares of profits and losses under each of the following plans: Netloss is $20.500, and the partnership agreement allocates 45 percent of profits to Susso, 35 percent to Schwimmer, and 20 percent to Perry. The agreement does not discuss the sharing of losses b. Net Income for the year is $136,500. The first 545,000 is allocated on the basis of part- ners' Capital investments. The next 575,000 is based on service, with $45,000 going to Sasso and $30.000 going to Schwimmer. Any remainder is shared equally c Net loss for the year is $136,300. The first 545,000 is allocated on the basis of partners Capital investments. The next $75,000 is based on service, with $45,000 going to Sasso and 530,000 going to Schwimmer. Any remainder is shared equally, 2. Revenues for the year were $858,000 and expenses were $721,500. Under plan (b), prepare the partnership income statement for the year. Assume a year end of September 30, 2017 3. How will what you have learned in this problem help you manage a partnership? Problem 12-3A SAC & Company is a partnership owned by K. Santiago, R. Astorga, and J. Camino, who share profits and losses in the ratio of 1:34. The adjusted trial balance of the partnership (in condensed form) at June 30, 2017, follows: Capital amounts for the balance sheet of a partnership 2) 3 2. Saron541.500 SAC & COMPANY Adjusted Trial Balance June 30, 2017 $ 166,000 800,000 $ 690,000 152,000 282.000 428.000 Cash Noncash assets abilities K. Santiago, capital R. Astorga, capital J. Camino, capital K. Santiago, withdrawals R. Astorga, withdrawals J. Camino, withdrawals Revenues Expenses Totale 126,000 272.000 312.000 748.000 634.000 $200.000 52 500.000 Required 1. Prepare the June 30, 2017, entries to close the Revenue, Expense, Income Summary, and Withdrawals accounts 2. Using T-accounts, insert the opening balances in the partners' Capital accounts, post the closing entries to the Capital accounts, and determine each partner'sending Capital balance. Chapter 12 Partnerships 715