Explore BrainMass

# Partnerships

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Please show me how to calculate 13-1a, 13-2a, 13-3a, 13-4a, and 13-5a. Thanks See attachment for detailed questions

13-1a: Prepare the entry to close the firms income account.........etc

13-2a: Complete the tables, one for each of the three years, by showing how to allocate partnership income or loss........etc

13-3a: Use the table to show how to distribute net income......prepare a statement of changes in partners equity, prepare jounral entry to close Income Summary.......etc

13-4a: Prepare journal entries to record withdrawel from partnership......Prepare jounral entries to record entry to partnership......etc.

13-5a: Prepare jounral entries for the sale of inventory.........etc

#### Solution Preview

CALCULATIONS FOR 13 1A
1) Where there is no agreement it is assumed that there is equal sharing of profits.
So the figures are 83,000 each.
2) The proportion of capital is 1:1.4:1.6, so the figures are 62,250 for Ries, 87,150 for Bax and99,600 for Simms.
3) After the salaries the interest on capital are
8,000 for Ries, 11,200 for Bax and 12,800 for Ries. The total amount is 32,000 and the balance is 15,000 which when divided equally gives you 5,000 each.
CALCULATIONS FOR 13 2A
1) The ratio is 2:3 so in year 1 it is 14,400 and 21,600 loss, year 2 it is 36,000 and 54,000, year profit and year 3 it is 60,000 and 90,000.
2) The ratio is 1:2 so in year 1 it is 12,000 and 24,000 loss, year 2 it is 30,000 and 60,000 and year 3 it is 50,000 and 100,000.
3) Parrow gets a salary of 72,000 so the loss is 108,000 which is divide in the proportion of 2:3 so we get 42,000 and 64,800 in year 1, in year 2 profit is 18,000 and the we get the two profit figures of 6,000 and 12,000. In year 3 the profit for distribution after Parrow's salary is 78,000 and the proportion is 31,200 and 46,800.
4) Parrow gets a salary of 72,000 so the loss is 108,000 and the interest is 10,500 so the loss is 118,500 which we divide in the proportion of 2:3 so we get 47,400 and 71,100. 2nd year profit becomes 3,000 and 4,500 . In the third year profit for distribution is 67,500 and the proportion is 27,000 and 40,500.

CALCULATIONS FOR 13 3A
Plan a : Equally, the profits will be 150,000 each.
Plan b : In the ratio of capital investments that is 1.4, 1, 1.6. We get 157,500, 112,500 and 180,000,
Plan c: After salaries we get for distribution 220,000 from which interest is paid 36,750, 26,250 and 42,000. We then have 115,000 for distribution which gives us 38,333 for each partner.
2. If the figure used is 209,000 then the ...

\$2.19