Exercise 12-4 McGill and Smyth have capital balances on January 1 of $54,000 and
ID: 2397784 • Letter: E
Question
Exercise 12-4 McGill and Smyth have capital balances on January 1 of $54,000 and $48,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $19,000 for McGill and $14,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) rermaining income or loss to be shared 70% by McGill and 30% by Smyth (1) Prepare a schedule showing the distribution of net income, assuming net income is $74,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) DIVISION OF NET INCOME McGill Smyth Total Salary allowance Interest allowance Total salaries and interest Remaining income/ deficiency Total division of net income (2) Prepare a schedule showing the distribution of net income, assuming net income is $26,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) DIVISION OF NET INCOME McGill Smyth Total Salary allowance Interest allowance Total salaries and interest Remaining income / deficiency Total division of net incomeExplanation / Answer
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Divison of Net Income Particulars Mcgill Smyth Total Salary Allowance $19,000.00 $14,000.00 $33,000.00 Interest Allowance $5,400.00 $4,800.00 $10,200.00 Total salaries and interest $24,400.00 $18,800.00 $43,200.00 Remaining income / deficiency $21,560.00 $9,240.00 $30,800.00 Total division of net income $45,960.00 $28,040.00 $74,000.00Related Questions
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