The following balances pertain to Omar and Hana Limited Liability partnership: Beginning capital balance of Omar - 201812488 Beginning capital balance of Hana = [4] * [201812488] Suppose that the contract of the partnership shows the following facts 1- There is a 10% interest on the beginning capital of partners 2- The is a monthly salary of Omar $2000 3- There is a 20% bonus of Hana of income after the bonus. Example:- Bonus to Managing Partner Based on Income A partnership contract may provide for a bonus to the managing partner equal to a speci-fied percentage of income. The contract should state whether the basis of the bonus is net income without deduction of the bonus as an operating expense or income after the bonus. For example, assume that the Alb & Bay LLP partnership contract provides for a bonus ner Alb of 25% of net income (without deduction of the bonus) and that the remaining income is divided equally. The net income is $300,000. After the bonus of $75,000 ($300,000 >0.25 = $75,000) to Alb, the remaining $225,000 of income is divided $112,500 to Alb and $112,500 to Bay. Thus, Alb's share of income is $187,500 ($75,000 + $112,500 = $187.500), and Bay's share is $ 112,500; the bonus is not recognized as an operating expense of the limited liability partnership If the partnership contract provided for a bonus of 25% of income after the bonus to Partner Alb, the bonus Bonus + income after bonus = $300,000 Let X = income after bonus 0.25X = bonus Then 1.25X = $300,000 income before bonus X = $300,000 -1.25 X = $240,000 0.25X = $60,000 bonus to Partner Alb' 4- The remainder is divided based on the balances of beginning capital Required: conus is computed as follows: 1. Record the journal and closing entries? 2- What are the balances of ending capital? The following balances pertain to Omar and Hana Limited Liability partnership: Beginning capital balance of Omar - 201812488 Beginning capital balance of Hana = [4] * [201812488] Suppose that the contract of the partnership shows the following facts 1- There is a 10% interest on the beginning capital of partners 2- The is a monthly salary of Omar $2000 3- There is a 20% bonus of Hana of income after the bonus. Example:- Bonus to Managing Partner Based on Income A partnership contract may provide for a bonus to the managing partner equal to a speci-fied percentage of income. The contract should state whether the basis of the bonus is net income without deduction of the bonus as an operating expense or income after the bonus. For example, assume that the Alb & Bay LLP partnership contract provides for a bonus ner Alb of 25% of net income (without deduction of the bonus) and that the remaining income is divided equally. The net income is $300,000. After the bonus of $75,000 ($300,000 >0.25 = $75,000) to Alb, the remaining $225,000 of income is divided $112,500 to Alb and $112,500 to Bay. Thus, Alb's share of income is $187,500 ($75,000 + $112,500 = $187.500), and Bay's share is $ 112,500; the bonus is not recognized as an operating expense of the limited liability partnership If the partnership contract provided for a bonus of 25% of income after the bonus to Partner Alb, the bonus Bonus + income after bonus = $300,000 Let X = income after bonus 0.25X = bonus Then 1.25X = $300,000 income before bonus X = $300,000 -1.25 X = $240,000 0.25X = $60,000 bonus to Partner Alb' 4- The remainder is divided based on the balances of beginning capital Required: conus is computed as follows: 1. Record the journal and closing entries? 2- What are the balances of ending capital
