Problem C1, C2 must be done in Excel and with calculations shown.
E-Z Manufacturing Company is a partnership among Yolanda Gonzales, Willie Todd and Linda Yeager. The partnership contract states that partnership profits will be split equally among the three partners. During the current year Gonzales withdrew $25,000, Todd withdrew $23,000, and Yeager withdrew $30,000. net income of E-Z Manufacturing Company amounted to $180,000.
a. calculate each partner's share of net income for the period.
b. describe the effects, if any, that the partnership operations would have on the individual tax returns of the partners.
c. prepare a statement of partner's equity for the year. Assume that partner's capital accounts had a beginning balances of $50,000, $60,000 and $40,000 for Gonzales, Todd and Yeager, respectively.
Prepare the stockholders' equity section of the corporate balance sheet for each company for the year ending Dec. 31, 2009
S & X Co. is a retail store owned solely by Paul Turner. During the month of November, the equity accounts were affected by the following events:
Nov. 9 Turner invested an additional $ 15,000 in the business.
Nov. 15 Turner withdrew $ 1,500 for his salary for the first two weeks of the month.
Nov. 30 Turner withdrew $ 1,500 for his salary for the second two weeks of the month.
Nov. 30 S & X distributed $ 1,000 of earnings to Turner.
a. Assuming that the business is organized as a sole proprietorship:
1. Prepare the journal entries to record the above events in the accounts of S & X.
2. Prepare the closing entries for the month of November. Assume that after closing all of the revenue and expense accounts the Income Summary account has a balance of $ 5,000.
Hint: Record the investment in a separate capital account and the withdrawals ( salary) in a separate drawing account. Close the drawing account into the capital account as part of the closing entries.
b. Assuming that the business is organized as a corporation:
1. Prepare the journal entries to record the above events in the accounts of S & X. Assume that the distribution of earnings on November 30 was payment of a dividend that was declared on November 20.
2. Prepare the closing entries for the month of November. Assume that after closing all of the revenue and expense accounts ( except Income Tax Expense) the Income Summary account has a balance of $ 2,000. Before preparing the closing entries, prepare the entries to accrue income tax expense for the month and to close the Income Tax Expense account to the Income Summary account. Assume that the corporate income tax rate is 30 percent.
c. Explain the causes of the differences in net income between S & X as a sole proprietorship and S & X as a corporation.
d. Describe the effects of the business operations on Turner's individual income tax return, assuming that the business is organized as ( 1) a sole proprietorship and ( 2) a corporation.© BrainMass Inc. brainmass.com September 23, 2018, 10:35 am ad1c9bdddf - https://brainmass.com/business/the-accounting-cycle/e-z-manufacturing-partners-share-of-net-income-455597
Attached is your answers.
Additional entries for income ...