Advanced Accounting Assigned Problem 1 Chapter 13

a) Fox, George, and Hayes form a partnership on 1-1-20X1. Fox contributes cash of $40,000 and equipment with a book value to Fox of $8,000 and a fair market value of $10,000. George contributes cash of $25,000 and equipment with a book value to George of $30,000 and a fair market value of $25,000. Hayes contributes $5,000 of cash and equipment with a book value to Hayes of $15,000 and a fair market value of $20,000.

Prepare the entry for the admission of the partners to the new partnership.

b) Fox, George, and Hayes partnership agree states the following regarding the allocation of net income:

• * Interest on beginning of the year capital balances is 5 percent.
• * A bonusistobeallocatedtoGeorgecomputedas10percentofincomeafterthebonusandinexcessof$50,000(Georgesnameisimportanttothepartnership thusthebonus)
• * Asalaryof$40,000istobeallocatedtoFox(Foxistheonlypartnerworkinginthepartnership).
• * Anyremainingincomeistobeallocated20percenttoFox,60percenttoGeorge,and20percenttoHayes.

Compute how much of the $90,000 of partnership income for year 20X1 is to be allocated to each partner.

Advanced Accounting Assigned Problem 2 Chapter 13

The Roe, Soh, and Tow Partnership earned $150,000 of net income for the year. The partnership agreement states the following regarding the allocation of net income:

• Salary to Roe of $40,000; Salary to Soh of $60,000, Salary to Tow of $50,000

Interest on average capitals the interest amounts are computed as $3,000 to Roe, $4,200 to Soh, and $4,800 to Tow.

• Anyremainingincomeistobeallocated25percenttoRoe,40percenttoSoh,and35%toTow.

Show the entry made to close income summary to partner capital.