Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The partnership of Jon, Kel, and Gla was created on January 2 , 2 0 1 6 , with each of the partners contribut ing

The partnership of Jon, Kel, and Gla was created on January 2,2016, with each of the partners contribut ing cash of $30,000. Reported profits, withdrawals, and additional investments were as follows:
Reported Net Income
Withdrawals Additional Investments
2016
$19.000
$4,000 Kel
$5,000 Gla
5,000 Jon
2017
22,000
8,000 Gla
5,000 Jon
3,000 Kel
2018
29,000
2,000 Gla
6,000 Gla
4,000 Kel
The partnership agreement provides that partners are to be allowed 10 percent interest on the beginning-of-the-year capital balances, that Jon is to receive a $7,000 salary allowance, and that remaining profits are to be divided equally.
After the books were closed on December 31,2018, it was discovered that depreciation had been understated by $2,000 each year and that the inventory taken at December 31,2018, was understated by $8,000.
REQUIRED
1. Calculate the balances in the three capital accounts on January 1,2019.
2. Calculate the balances that should be in the three capital accounts on January 1,2019, taking into account the corrections that must be made for errors made in the calculation of income in

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Theory

Authors: William R. Scott, Patricia O'Brien

8th Edition

013416668X, 978-0134166681

More Books

Students also viewed these Accounting questions

Question

Distinguish between controllable and non-controllable costs.

Answered: 1 week ago

Question

Always show respect for the other person or persons.

Answered: 1 week ago

Question

Self-awareness is linked to the businesss results.

Answered: 1 week ago