Stephanie Barnes and Layla Taylor formed a partnership, Design Pros Imaging, last May. Each person contributed assets to the business and both partners work full-time in the business. The business made a profit in the first year, which ended Dec. 31, but Layla and Stephanie are still discussing how to divide the net income equitably. Below is a table showing some options that their accountant worked up. Partner Option Taylor Barnes $28,000 $43,200 548,000 $24.000 A B 56.660 59 420 33.552 2260 540 212 531.788 $33.500 529 500 5660 9.420 D E -1770-5310 538.390 $33.610 533.500 529 500 1.350 3.825 3.825 537,325 534.675 F 536.000 $36.000 56.660 59 420 10 800 11,200 33.840 $28,740 543260 Another designer, Chad Mineart, joined the partnership on January 1, after all assets were adjusted to their market values. He is hoping to work in the business next year. The journal entries to record his admission are shown below. Assume that Layla and Stephanie have decided to adopt Option D on the Design Pros Imaging panel. They are wondering how the division of net income under Option D will change with the new partner. Assume that income is the same as the prior year. Chad will not have a salary allowance the first year, but any remaining net income will be shared equally amor year's data Dividing Partnership Income Shaded cells have feedback Unfortunately, the accountant's notes about each option have been lost. Stephanie remembers that the accountant proposed paying 4% interest yearly on each partner's capital investment at the beginning of the year. Layla asked the accountant to include at least one bonus option. The accountant used last year's results to show how the net income would have been divided under each option Taylor Barnes 1. What is each partner's capital investment? 2. What is each partner's proposed salary amount? $33,500 $29,500 Points 2/4 3. What was the net income for Design Pros Imaging last year? $ 4. Which option shows how the net income will be split If the partners do not reach an agreement? 5. In Option D, what do the negative amounts represent? A business loss. 6. What is the last item in Option E that is divided between the partners? Remaining net income. Points 1/4 Feedback Check My Work Next Receipt of partner equity 2. What was the sales price of the equity that Chad purchased? $35,325 3. Assume that Layla and Stephanie have decided to adopt Option D on the Design Pros Imaging panel. They are wondering how the divis Dwill change with the new partner. Assume that income is the same as the prior year. Chad will not have a salary allowance the first year, will be shared equally among the partners. Using last year's data as an example, extend option D to allow for Chad's participation. What income be? $ Feedback Check My Work 1-2. Carefully examine the journal entries. 3. Look at Option D and figure the amounts under the new partnership structure. New Partner Another designer, Chad Mineart, joined the partnership on January 1, after all assets were adjusted to their market values. He is hoping to The journal entries to record his admission follow. JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 16,650.00 2 Jan 1 Layla Taylor, Capital Stephanie Barnes, Capital Chad Mineart, Capital 35,325.00 51,975.00 1 Cash 45,000.00 5 Chad Mineart, Capital 45,000.00 1. How was Chad admitted to the partnership? Check all that apply. Next Check My Work Capit U. 1. How was Chad admitted to the partnership? Check all that apply. Income redistribution to partners. Contribution of service and investment. Purchase from the existing partners. Participation through negotiation Receipt of partner equity. 2. What was the sales price of the equity that Chad purchased? cannot be determined. 3. Assume that Layla and Stephanie have decided to adopt Option D on the Design Pros Imaging panel. They are wondering how the div D will change with the new partner. Assume that income is the same as the prior year. Chad will not have a salary allowance the first yea will be shared equally among the partners. Using last year's data as an example, extend option to allow for Chad's participation. What Income be? $ 5.UUUU artnership? Check all that apply. partners. and investment ing partners. gotiation y equity that Chad purchased? cannot be determined. hie have decided to adopt Option on the Design Pros Imaging panel. They are wondering how the division of net income under Option 1. Assume that income is the same as the prior year. Chad will not have a salary allowance the first year, but any remaining net income partners. Using last year's data as an example, extend option to allow for Chad's participation. What would Chad's share of the net