Ellen, Fargo, and Gary are partners who share profits and losses 20 percent, 20 percent, and 60
Question:
Ellen, Fargo, and Gary are partners who share profits and losses 20 percent, 20 percent, and 60 percent, respectively, after Ellen and Fargo each receive a $12,000 salary allowance. Capital balances on January 1, 2011, are as follows:
Ellen (20%) ....... $ 69,000
Fargo (20%) ...... 85,500
Gary (60%) ...... 245,500
During 2011, Gary invested an additional $20,000 in the partnership, and Ellen and Fargo each withdrew $12,000, equal to their salary allowances as provided by the profit and loss sharing agreement. The partnership net assets at December 31, 2011, were $481,000.
REQUIRED: Prepare a statement of partnership capital for the year ended December 31, 2011.
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Step by Step Answer:
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith