These dont have to be in for 2 weeks but I would like to review them before turn
ID: 2388477 • Letter: T
Question
These dont have to be in for 2 weeks but I would like to review them before turning them in. Last time, I only got a 75% from the answers I received. I would like an expert on these issues if possible. Thank you. Question 1:1 - The PQ partnership has the following plan for the distribution of partnership net income (loss):
Required:
Calculate the distribution of partnership net income (loss) for each independent situation below (for each situation, assume the average capital balance of P is $140,000 and of Q is $240,000).
1. Partnership net income is $360,000.
2. Partnership net income is $240,000.
3. Partnership net loss is $40,000
Explanation / Answer
Let me preface this by saying, after reading the question posted as is, the question assumes that the partners share profits 50/50. I'm currently studying for the CPA exam and recently went over this in the lectures. Barring any other information not shown in the question, this should be the right distribution of income/loss.
1) P Q
Avg. Capital Bal. 140 240
Distribution of NI + 180 +180 (360*.5= 180 per partner)
Ending Capital Balance 320 420
2) P Q
Avg. Capital Bal 140 240
Distribution of NI +120 +120 (240*.5=120 per partner)
Ending Capital Balance 260 360
3) P Q
Avg. Capital Bal. 140 240
Distribution of Net Loss (20) (20) (40 Loss * .5= (20) per partner
Ending Capital Bal. 120 220
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