E 16-4 Partnership income allocation-Salary allowance, bonus, and interest Rama, Shinta, and Lesmana created a partnership...

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E 16-4 Partnership income allocation-Salary allowance, bonus, and interest Rama, Shinta, and Lesmana created a partnership to own and operate a video rental store. The partnership agreement provides that profits are to be divided as follows: Rama receives bonus equal to 10 percent of income net of the bonus. Rama receives a salary of $12,000 and Shinta receives a salary of $10,000. All partners receive 10 percent interest on weighted average capital balances. Remaining profits or losses are divided equally among the three partners. Additional information is summarized as follows: Capital, January 1, 2016 Addition (Drawing): July 1, 2016 October 1, 2016 Rama $200,000 20,000 (12,000) Shinta $125,000 (10,000) 15,000 Lesmana $75,000 5,000 REQUIRED: Prepare a schedule to allocate partnership net income of $110,000 for 2016. E 16-4 Partnership income allocation-Salary allowance, bonus, and interest Rama, Shinta, and Lesmana created a partnership to own and operate a video rental store. The partnership agreement provides that profits are to be divided as follows: Rama receives bonus equal to 10 percent of income net of the bonus. Rama receives a salary of $12,000 and Shinta receives a salary of $10,000. All partners receive 10 percent interest on weighted average capital balances. Remaining profits or losses are divided equally among the three partners. Additional information is summarized as follows: Capital, January 1, 2016 Addition (Drawing): July 1, 2016 October 1, 2016 Rama $200,000 20,000 (12,000) Shinta $125,000 (10,000) 15,000 Lesmana $75,000 5,000 REQUIRED: Prepare a schedule to allocate partnership net income of $110,000 for 2016.

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To allocate the partnership net income of 110000 for 2016 according to the partnership agreement well follow these steps Determine each partners share of the income net of the bonus Calculate the tota... View the full answer