The partnership of Angel Investor Associates began operations on January 1, 2012, with contributions from two partners
Question:
The partnership of Angel Investor Associates began operations on January 1, 2012, with contributions from two partners as follows:
Scott Wilson ... $120,000
Michael Goforth .. 80,000
The following additional partner transactions took place during the year:
1. In early January, Lance McGinnis is admitted to the partnership by contributing $50,000 cash for a 20% interest.
2. Net income of $250,000 was earned in 2012. In addition, Scott Wilson received a salary allowance of $45,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting McGinnis.
3. The partners’ withdrawals are equal to half of the increase in their capital balances from salary allowance and income.
Prepare a statement of partnership equity for the year ended December 31, 2012.
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:
1 45000 984002 2 656002 3 410002 Admission of Lance McGinnis Equity of initial partners prior to adm...View the full answer
