19. Rodgers and Winter had capital balances of $60,000 and $90,000, respectively
ID: 2330521 • Letter: 1
Question
19.
Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000.
a. Present the Division of net income section of the income statement for the current year.
b. Assuming that the net income had been $65,000 instead of $110,000, present the Division of net income section of the income statement for the current year.
Net income $110,000 Rodgers Winter Total Division of net income: Salary allowance $ $ $ Interest allowance Total Net income $ $ $Explanation / Answer
Answer a. Net Income 110,000.00 Rodgers Winter Total Division of Net Income: Salary Allowance 25,000.00 30,000.00 55,000.00 Interest Allowance 7,200.00 10,800.00 18,000.00 Remaining Income 18,500.00 18,500.00 37,000.00 Net Income 50,700.00 59,300.00 110,000.00 Answer b. Net Income 65,000.00 Rodgers Winter Total Division of Net Income: Salary Allowance 25,000.00 30,000.00 55,000.00 Interest Allowance 7,200.00 10,800.00 18,000.00 Excess of Allowances Over Net Income (4,000.00) (4,000.00) (8,000.00) Net Income 28,200.00 36,800.00 65,000.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.