Razul and Amy decided to start a partnership called SA Consulting on January 1, 2020. Each of them contributed a number of items to the partnership, which are listed below. All tangible assets are listed at their market value. Razul Cash Equipment Bank Loan $46,000 194,000 85,000 Amy Cash Furniture Accounts Payable $62,000 78,000 40,000 On March 1, Razul and Amy added a new partner to the business, Sheila. Sheila will contribute $105,000 and receive a 30% 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, Razul and Amy withdrew $22,000 and $18,000 respectively and the business reported a net income of $450,000. Their partnership agreement provided for sharing of net income (Loss) on the following basis: 1. Salary of $65,000 is allocated to Razul, $52,000 to Amy, and $23,000 to Sheila. 2. Interest is allocated at 8% of each partner's opening capital balance. 3. Remainder is shared where Razul gets 38%, Amy gets 27%, and Sheila gets 35%. e) Prepare a schedule showing the allocation of the net income to the partners. Razul Amy Sheila Total $450,000 Net Income f) 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. Date Account Title and Explanation Debit Credit 5) 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 $72,500 and all other assets are sold at their given values. Any gains or losses from liquidation are split evenly among all partners. Cash Accounts Receivable Net Equipment Net Furniture Accounts Payable Bank Loan 5536,200 55,000 252,200 93.600 48.000 119,000 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 Date Account Title and Explanation Debit Credit Razul and Amy decided to start a partnership called SA Consulting on January 1, 2020. Each of them contributed a number of items to the partnership, which are listed below. All tangible assets are listed at their market value. Razul Cash Equipment Bank Loan $46,000 194,000 85,000 Amy Cash Furniture Accounts Payable $62,000 78,000 40,000 On March 1, Razul and Amy added a new partner to the business, Sheila. Sheila will contribute $105,000 and receive a 30% 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, Razul and Amy withdrew $22,000 and $18,000 respectively and the business reported a net income of $450,000. Their partnership agreement provided for sharing of net income (Loss) on the following basis: 1. Salary of $65,000 is allocated to Razul, $52,000 to Amy, and $23,000 to Sheila. 2. Interest is allocated at 8% of each partner's opening capital balance. 3. Remainder is shared where Razul gets 38%, Amy gets 27%, and Sheila gets 35%. e) Prepare a schedule showing the allocation of the net income to the partners. Razul Amy Sheila Total $450,000 Net Income f) 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. Date Account Title and Explanation Debit Credit 5) 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 $72,500 and all other assets are sold at their given values. Any gains or losses from liquidation are split evenly among all partners. Cash Accounts Receivable Net Equipment Net Furniture Accounts Payable Bank Loan 5536,200 55,000 252,200 93.600 48.000 119,000 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 Date Account Title and Explanation Debit Credit
