The income statement for the Apple-Jack Partnership for the year ended December 31, 20X5, follows: Additional Information
Question:
Additional Information for 20X5
1. Apple began the year with a capital balance of $40,800.
2. Jack began the year with a capital balance of $112,000.
3. On April 1, Apple invested an additional $15,000 into the partnership.
4. On August 1, Jack invested an additional $20,000 into the partnership.
5. Throughout 20X5, each partner withdrew $400 per week in anticipation of partnership net income. The partners agreed that these withdrawals are not to be included in the computation of average capital balances for purposes of income distributions. Apple and Jack have agreed to distribute partnership net income according to the following plan:
Required
a. Prepare a schedule that discloses the distribution of partnership net income for 20X5. Show supporting computations in good form. Round to the nearest dollar.
b. Prepare the statement of partners capital at December 31, 20X5.
c. How would your answer to part a change if all of the provisions of the income distribution plan were the same except that the salaries were $30,000 to Apple and $35,000 toJack?
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Step by Step Answer:
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker