Kimble, Sykes, and Gerard open an accounting practice on January 1, 2022, in Chicago, Illinois, to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Kimble, Sykes, and Gerard open an accounting practice on January 1, 2022, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $228,000, $190,000, and $102,000, respectively. An articles of partnership agreement is drawn up stipulating the following: Personal drawings are allowed annually up to an amount equal to 10 percent of the partner's beginning capital balance for the year. Profits and losses are allocated according to the following plan: 1. Each partner receives an annual salary allowance of $55 per billable hours worked. 2. Interest is credited to the partners' capital accounts at the rate of 12 percent of the beginning capital balance for the year. 3. Kimble and Sykes are eligible for an annual bonus of 10 percent of net income after subtracting the bonus, salary allowance, anc interest. The agreement also states that there will be no bonus if there is a net loss or if salary and interest result in a negative remainder of net income to be distributed. 4. Any remaining partnership profit or loss is to be divided evenly among all partners. On January 1, 2023, the partners admit Nichols to the partnership. Nichols contributes cash directly to the business in an amount equa to a 25 percent interest in the book value of the partnership property subsequent to this contribution. The partnership profit and loss sharing agreement is not altered upon Nichols's entrance into the firm; the general provisions continue to be applicable. The billable hours for the partners during the first three years of operation follow: Kimble Sykes Gerard Nichols 2022 2,180 1,920 1,780 0 2023 1,800 2024 1,880 1,500 1,620 1,380 1,310 1,560 1,550 The partnership reports net income (loss) for 2022 through 2024 as follows: Req A 2022 Req A 2023 Req A 2024 Req B Prepare schedules that allocate for 2023 net income to the partners. Note: Loss amounts should be indicated with a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar amounts. Net loss Salary allowance Interest Bonus Remainder to allocate Total allocation Net Income Allocation-2023 Kimble Sykes Gerard Nichols Totals Req A 2022 Req A 2023 Req A 2024 Req B Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2024. Note: Amounts to be deducted should be indicated with minus sign. Do not round intermediate calculations. Round your answers to nearest dollar amounts. KIMBLE, SYKES, GERARD, and NICHOLS Statement of Partners' Capital 0 For the Year Ending December 31, 2024 Kimble Sykes Gerard Nichols Totals 0 Beginning balances $ Profit allocation 0 0 0 $ Drawings 0 0 0 Ending Balances $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 < Req A 2024 Req B > < Req A 2022 Req A 2024 > 2022 2023 2024 $ 294,000 (13,600) 489,000 Each partner withdraws the maximum allowable amount each year. Required: a. Prepare schedules that allocate each year's net income to the partners. b. Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2024. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Req A 2022 Req A 2023 Req A 2024 Req B Prepare schedules that allocate for 2024 net income to the partners. Note: Do not round intermediate calculations. Round your answers to the nearest dollar amounts. Req A 2022 Req A 2023 Req A 2024 Req B Prepare schedules that allocate for 2022 net income to the partners. Note: Loss amounts should be indicated with minus sign. Net Income Allocation-2022 Kimble Sykes Gerard Totals Net income Salary allowance $ Interest Bonus $ 294,000 Net income Salary allowance Interest Bonus 119,900 $ 105,600 $ 27,360 0 22,800 0 97,900 12,240 (323,400) Remaining net income (62,400) 0 0 Remainder to allocate (91,800) Total allocation (30,600) (30,600) (30,600) 91,800 Total allocation $ 116,660 $ 97,800 $ 79,540 $ 0 < Req A 2022 Req A 2023 > Net Income Allocation-2024 Kimble Sykes Gerard Nichols Totals $ 0 $ < Req A 2023 0 0 0 $ 0 0 0 $ 0 $ 0 $ 0 Req B > Kimble, Sykes, and Gerard open an accounting practice on January 1, 2022, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $228,000, $190,000, and $102,000, respectively. An articles of partnership agreement is drawn up stipulating the following: Personal drawings are allowed annually up to an amount equal to 10 percent of the partner's beginning capital balance for the year. Profits and losses are allocated according to the following plan: 1. Each partner receives an annual salary allowance of $55 per billable hours worked. 2. Interest is credited to the partners' capital accounts at the rate of 12 percent of the beginning capital balance for the year. 3. Kimble and Sykes are eligible for an annual bonus of 10 percent of net income after subtracting the bonus, salary allowance, anc interest. The agreement also states that there will be no bonus if there is a net loss or if salary and interest result in a negative remainder of net income to be distributed. 4. Any remaining partnership profit or loss is to be divided evenly among all partners. On January 1, 2023, the partners admit Nichols to the partnership. Nichols contributes cash directly to the business in an amount equa to a 25 percent interest in the book value of the partnership property subsequent to this contribution. The partnership profit and loss sharing agreement is not altered upon Nichols's entrance into the firm; the general provisions continue to be applicable. The billable hours for the partners during the first three years of operation follow: Kimble Sykes Gerard Nichols 2022 2,180 1,920 1,780 0 2023 1,800 2024 1,880 1,500 1,620 1,380 1,310 1,560 1,550 The partnership reports net income (loss) for 2022 through 2024 as follows: Req A 2022 Req A 2023 Req A 2024 Req B Prepare schedules that allocate for 2023 net income to the partners. Note: Loss amounts should be indicated with a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar amounts. Net loss Salary allowance Interest Bonus Remainder to allocate Total allocation Net Income Allocation-2023 Kimble Sykes Gerard Nichols Totals Req A 2022 Req A 2023 Req A 2024 Req B Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2024. Note: Amounts to be deducted should be indicated with minus sign. Do not round intermediate calculations. Round your answers to nearest dollar amounts. KIMBLE, SYKES, GERARD, and NICHOLS Statement of Partners' Capital 0 For the Year Ending December 31, 2024 Kimble Sykes Gerard Nichols Totals 0 Beginning balances $ Profit allocation 0 0 0 $ Drawings 0 0 0 Ending Balances $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 < Req A 2024 Req B > < Req A 2022 Req A 2024 > 2022 2023 2024 $ 294,000 (13,600) 489,000 Each partner withdraws the maximum allowable amount each year. Required: a. Prepare schedules that allocate each year's net income to the partners. b. Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2024. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Req A 2022 Req A 2023 Req A 2024 Req B Prepare schedules that allocate for 2024 net income to the partners. Note: Do not round intermediate calculations. Round your answers to the nearest dollar amounts. Req A 2022 Req A 2023 Req A 2024 Req B Prepare schedules that allocate for 2022 net income to the partners. Note: Loss amounts should be indicated with minus sign. Net Income Allocation-2022 Kimble Sykes Gerard Totals Net income Salary allowance $ Interest Bonus $ 294,000 Net income Salary allowance Interest Bonus 119,900 $ 105,600 $ 27,360 0 22,800 0 97,900 12,240 (323,400) Remaining net income (62,400) 0 0 Remainder to allocate (91,800) Total allocation (30,600) (30,600) (30,600) 91,800 Total allocation $ 116,660 $ 97,800 $ 79,540 $ 0 < Req A 2022 Req A 2023 > Net Income Allocation-2024 Kimble Sykes Gerard Nichols Totals $ 0 $ < Req A 2023 0 0 0 $ 0 0 0 $ 0 $ 0 $ 0 Req B >
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Question 6. (Marks 10) On 15 March 2018, Ali borrowsOMR6000 at 3% interest rate for four months from a lender who charges a discount rate of 10%. Find the bank discount if the note was discounted on...
-
The following transactions were selected from the records of OceanView Company: July 12 July 15 July 20 July 23 Sold merchandise to Customer R, who charged the $3,700 purchase on his Visa credit...
-
the top prize for the state lottery is 1 0 8 , 5 0 0 , 0 0 0 . You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to...
-
Consider the example in Exhibit 5.5. Can you think of anything else you might do with that example that would be helpful to the ultimate decisionmaker? exhibit 5.5 Decision Tree Analysis Using Net...
-
General Halftrack suspects that Colonel Sy Verleaf is discriminating in his promotions by promoting more whites than nonwhites. The following table illustrates this hypothesis: When called in to...
-
Account HW Nunn Industries had the following items on its December 31, 20X3, balance sheet: Cash and cash equivalents ................ $56,230 Accounts payable............................96,640...
-
Kimiko Company's standard labor cost per unit of output is $ 1 8 (2 hours X \($9.00\) per hour). During August, the company incurs 1,850 hours of direct labor at an hourly cost of \($9.60\) per hour...
-
Roger Smith established an insurance agency on July 1, 20Y5, and completed the following transactions during July: a. Opened a business bank account in the name of Smith Insurance Inc., with a...
-
3 A C 12 cosd= 13 Yanda verilen AB geninde, |AB| = |AC| dir. lduuna gre sin(RAC) deeri katr?
-
Write a paper about a group dynamics. A group can be defined as several individuals who come together to accomplish a particular task or goal. Group dynamics refers to the attitudinal and behavioral...
-
Solve: +381 = -82. Provide your answer below: x =
-
3. The HTTP protocol at application layer is a non-secure protocol for communication. The secure version of HTTP is HTTPS. (10 marks) a. Based on the structure of the OSI model and TCP/IP protocol...
-
In 2020, the number of social media users worldwide was 4.23 billion. This represented an increase in social media users of 17.7% from the previous year. How many social media users were there...
-
A four-pole Y-connected synchronous generator rated at 550 VA, 3.2 kV, 0.8 PF lagging, and 60 Hz. Its armature resistance is 0.7 ohm and the armature reactance is j15 ohm. The core losses of this...
-
Consider the following facts and identify those that would be necessary to (1) disclose or (2) include in an antenuptial agreement. 1 Mac is a widower who has three adult children. All the children...
-
No.1 Unsatisfied Customer A customer complained and reported the actions of the security guard and how poorly they handled the situation a) What steps would you take with the security guard so it...
-
A condenser (heat exchanger) brings 1 kg/s water flow at 10 kPa quality 95% to saturated liquid at 10 kPa, as shown in Fig. P4.91. The cooling is done by lake water at 20C that returns to the lake at...
-
What is the Euro Areas total for Groups A through C? Use the following balance of payments data for the Euro Area from the IMF to answer this problem. Assumptions (billion US$) 2000 2001 2002 2003...
-
What is the Euro Areas total for Groups A through D? Use the following balance of payments data for the Euro Area from the IMF to answer this problem. Assumptions (billion US$) 2000 2001 2002 2003...
-
Trade Deficits and J-Curve Adjustment Paths. Assume that the United Arab Emirates has the following import/ export volumes and prices. It undertakes a major devaluation of the UAE Dirham (AED) by 6%...
Study smarter with the SolutionInn App