Larry, Curly and Moe formed the HydroCarpets partnership on January 1 of the current year. The...
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Larry, Curly and Moe formed the HydroCarpets partnership on January 1 of the current year. The partners invested assets and liabilities into the partnership as follows: Larry: Cash Accounts Receivable Curly: Land Building Mortgage payable Moe: Cash Office equipment $ 55,000 20,000 20,000 180,000 95,000 35,000 25,000 During the first year of business the net income was $141,000. 1) Prepare the journal entries to record the partnership setup 2) Prepare net income allocation using following plans separately. (please note that you need to show me the calculation formula and steps) Plant: on a 3:3:4 ratio of partnership agreement Plan2: on an original investment ratio respectively Plan3: Interest allowance of 10% on initial investments, salary allowance of $35,000 to Larry, $40,000 to Curly and $45,000 to Moe, with any remaining balance to be shared equally among the three partners 3) Each partner withdrew $30,000 cash from the partnership during the year. Please prepare a statement of partners capital for the year end December31, based on the net Income Plan2 allocation. Larry, Curly and Moe formed the HydroCarpets partnership on January 1 of the current year. The partners invested assets and liabilities into the partnership as follows: Larry: Cash Accounts Receivable Curly: Land Building Mortgage payable Moe: Cash Office equipment $ 55,000 20,000 20,000 180,000 95,000 35,000 25,000 During the first year of business the net income was $141,000. 1) Prepare the journal entries to record the partnership setup 2) Prepare net income allocation using following plans separately. (please note that you need to show me the calculation formula and steps) Plant: on a 3:3:4 ratio of partnership agreement Plan2: on an original investment ratio respectively Plan3: Interest allowance of 10% on initial investments, salary allowance of $35,000 to Larry, $40,000 to Curly and $45,000 to Moe, with any remaining balance to be shared equally among the three partners 3) Each partner withdrew $30,000 cash from the partnership during the year. Please prepare a statement of partners capital for the year end December31, based on the net Income Plan2 allocation.
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Answer rating: 100% (QA)
1 No Account Titles and Explanation Debit Credit 1 Cash 55000 Accounts receivable 20000 Larry capita... View the full answer
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
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