Mel and Dav created a partnership to own and operate a health-food store. The partnership agreement provided
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On January 1, 2012, the partnership agreement was changed to reflect the fact that Dav could no longer devote any time to the store’s operations. The new agreement allows Mel a salary of $18,000, and the remaining profits and losses are divided equally. In 2012 an error was discovered such that the 2011 reported income was understated by $4,000. The partnership income of $25,000 for 2012 included this $4,000 related to 2011.
REQUIRED: Prepare a schedule to allocate the $25,000 reported 2012 partnership income to Mel and Dav.
Partnership
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...
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Related Book For
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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