Record your responses on the spreadsheet template.

2014

February 1 - Brady and Manning decide to start up a partnership. Brady brings in $10 000 cash and equipment costing $60 000, with $17 000 in the accumulated depreciation account. The fair market value of the equipment is $37 000. Manning brings $54 000 in cash. They agree to an income ratio of 5:4.

December 31 - The business records a net income of $24 000, and Brady has a debit balance of
$16 000 in his drawings account.

a) Record the journal entry to establish the partnership.

b) Record the entry to allocate the net income to the partners' capital accounts.

c) Prepare a Statement of Partners' Equity for 2014.

2015

January 1 - McNabb joins the partnership by contributing $46 000 in cash. A news partnership agreement is drawn up. Brady, Manning and McNabb agree to salaries of $5000 for each partner and a 5:4:3 income ratio.

December 31 - The business recorded a net income of $30 000. Brady had drawings of $20 000 and Manning had drawings of $4 000.

a) Record the entry to admit the new partner into the business.

b) Record the entry to allocate the net income to the partners' capital accounts.

c) Prepare a Statement of Partners' Equity for 2015.

2016

January 1 - Manning decides to leave the partnership. McNabb agrees to pay Manning $73 000 in a private transaction for his entire share in the business. The result is that all of Manning's equity will be transferred to McNabb. The income or loss will now be divided equally (50-50) between Brady and McNabb. There will be no salary.

December 31 - The business recorded a net loss of $46 000. There were no drawings. Show the entry to allocate the net income to the partners' capital accounts. Prepare a Statement of Partners' Equity for 2016.

a) Record the entry to record the departure of Manning.

b) Record the entry to allocate the net income to the partners' capital accounts.

c) Prepare a Statement of Partners' Equity for 2016.

2017

January 1 – The partners decide to liquidate the partnership. They have the following balances:

Cash $12 000
Accounts Receivable $4 500
Equipment $ 110 000
Accumulated Depreciation $ 25 000
Accounts Payable $ 4 417

The partners were able to collect $3 500 of the accounts receivable and sell the equipment for $72 000.

a) Record all journal entries to dissolve the partnership.

 
 

Transcribed Image Text:

General Journal SUPPORTING CALCULATIONS Page Credit Date Particulars Debit 2014 Jan 1 Dec. 31 2015 2015 Jan 1 Brady Manning McNabb Total Income Ratlo 5:4:3 Net Income Income Distribution Dec 31 Salary Net Income allocated PRIOR to ratio application Net Income to be allocated b3sed on Income ratio Share of Income based on income ratio Total allocation of net income 2016 Jan Dec. 31 2017 Jan 2017 Balance Sheet Before Ug Affer Uq ABseta Cash Equipment AR Llabliities & Equity Accounts Payable Brady, Capital NGNabb, Capital 1. General Journal SUPPORTING CALCULATIONS Page Credit Date Particulars Debit 2014 Jan 1 Dec. 31 2015 2015 Jan 1 Brady Manning McNabb Total Income Ratlo 5:4:3 Net Income Income Distribution Dec 31 Salary Net Income allocated PRIOR to ratio application Net Income to be allocated b3sed on Income ratio Share of Income based on income ratio Total allocation of net income 2016 Jan Dec. 31 2017 Jan 2017 Balance Sheet Before Ug Affer Uq ABseta Cash Equipment AR Llabliities & Equity Accounts Payable Brady, Capital NGNabb, Capital 1.

Answer rating: 100% (QA)

Atronding to the data credit Debit Cyh Alc Equipment Alc To ... View the full answer