1. Journalize each of the following transactions 2. Prepare a schedule to show division of partnership income...

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Question:

1. Journalize each of the following transactions

2. Prepare a schedule to show division of partnership income at the end of 2016, 2017 and 2018

3. Show your work as needed to record the admission or withdrawal of the partners

2016

April 13 Richards, Baxter and Royce create RB&R Holdings. Richards and Baxter Each invest $10,000, while Royce invests $24,000. They agree that each will get a 10% interest allowance on each partner's beginning of year Capital balance. In addition, Richards and Baxter are to receive $5,000 salary allowances; the remainder of the income is to be divided evenly.

Dec. 31 The partnership’s income for the year is $39,900, and withdrawals at year-end are Richards; $5,000; Baxter; $12,500; and Royce; $1,000.

2017

Jan 12 Richards sells her interest to Murdock for $20,000, who is accepted by Baxter and Royce as a partner in the new BR&M Holdings company. The profits are to be shared equally, after Baxter and Royce each receive $25,000 salaries.

Dec. 31 The partnership’s income for the year is $35,000, and their withdrawals are: Baxter; $2,500 and Royce; $2,000.

2018

Jan 1 Elway is admitted as a partner after investing $60,000 cash in the new Elway and Associates partnership. Elway is given a 60% interest in capital after the other partners transfer $9,180 to his account from each of theirs. A 20% interest allowance (on the beginning of year capital balances) will be used in sharing profits but there will be no salaries. Elway will get 40% of the remainder, and the other three partners will each get 20%. (Note the interest allowance is to be calculated on each partner's capital balance immediately after the admission of Elway).

Dec. 31 Elway as & Associates earns $127,600 for the year, and year-end withdrawals are Baxter; $25,000; Royce; $27,000; Murdoch; $15,000 and Elway; $40,000.

Jan 1 Elway buys out Baxter and Royce for the balances of their capital accounts paying them $92,000 cash from personal funds. Murdoch and Elway will share future profits on a 1:9 ratio.

Feb 29 The partnership has earned $10,000 of income since the beginning of the year. Murdock retires and receives partnership cash equal to her capital balance. Elway takes possession of the partnership assets in his own name and the business is dissolved.