The income statement for the Apple Jack Partnership for the year ended December 31, 20X5, follows: APPLE-JACK PARTNERSHIP Income Statement For the Year Ended December 31, 20x5 Net Sales $ 384,000 Cost of Goods Sold (197,000) Gross Margin $ 107,000 Operating Expenses (31,000 Net Income $ 76,830 Additional Information for 20X5 1. Apple began the year with a capital balance of $48,300. 2 Jack began the year with a capital balance of $115,000 3. On April 1. Apple invested an additional $17.100 Into the partnership 4. On August 1. Jack invested an additional $22,000 into the partnership. 5. Throughout 20X5, each partner withdrew $500 per week in anticipation of partnership net income. The partners agreed that these withdrawals are not to be included in the computation of average capital balances for purposes of income distributions Apple and Jack have agreed to distribute partnership net income according to the following plan: Apple Jack 1. Interest on average capital balances 2. Bonus on net income before the bonus but after interest on average capital balances 3. Salaries $18,000 $21,800 4. Residual (if positive) 70% Residual (if negative) 6% 6 10% rs 50% Sex Required: a. Prepare a schedule that discloses the distribution of partnership net income for 20X5. (Do not round intermediate calculations. Round your final answers to nearest whole dollar. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Apple Total Jack b. Prepare the statement of partners' capital at December 31, 20X5. (Do not round intermediate calculations. Round your final answers to nearest whole dollar. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) APPLE-JACK PARTNERSHIP Statement of Partners' Capital For the Year Ended December 31, 20X5 Apple Jack Total Balance, January 1, 20X5 S 0 0 Net income distribution 0 $ 0 $ 0 $ 0 0 Balance, December 31, 20X5 5 05 ops 0 c. How would your answer to part a change if all of the provisions of the income distribution plan were the same except that the salaries were $40,000 to Apple and $20,774 to Jack? (Do not round Intermediate calculations. Round your final answers to nearest whole dollar. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) APPLE-JACK PARTNERSHIP Distribution of 576,000 Net Income Apple Jack Total % 36 Profit percentage of positive) Profit percentage (if negative) Net income Interest on average capital balances 0 % 0 0 $ Bonus on net income before the bonus and atter interest 0 0 0 5 Salaries S 0 Residual income 00ss) -allocate Total $ 0 $ 0 $ 0
