Problem 14-11 (Algo) (LO 14-4, 14-5, 14-6) A partnership begins its first year of operations with the following capital balances: Allegan, Capital Berrien, Capital Kent, Capital According to the articles of partnership, all profits will be assigned as follows: • Allegan will be awarded an annual salary of $18,000 with $9.000 assigned to Kent. . The partners will be attributed Interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:23 basis, respectively. . Each partner is allowed to withdraw up to $5,000 per year. The net loss for the first year of operations is $30,000, and net Income for the subsequent year is $35,000. Each partner withdraws the each period. maximum amount from Required: Prepare schedules that compute the balances in each partner's capital account at the end of each of the first two years of partnership operations. Ending aital Ending Capital Balance Year Balance Year One Two $82,000 72,000 82,000 Prepare schedules that compute the balances in each partner's capital account at the end of Year One of partnership operations. Note: Amounts to be deducted should be indicated with minus sign. Beginning capital Net loss Drawings Ending capta ALLEGAN, BERRIEN, and KENT Statement of Partner's Capital For the Year One Allegan S S 82.000 S (10.000) (5,000 87.000 $ Berrien 72.000 S (30.000) (5.000) 37.000 $ Kent 62.000 5 (50,000) 9.000 47.000 Total 238.000 710.000 000) 151/000 Show less
Problem 14-11 (Algo) (LO 14-4, 14-5, 14-6) A partnership begins its first year of operations with the following capital balances: Allegan, Capital Berrien, Capital Kent, Capital According to the articles of partnership, all profits will be assigned as follows: • Allegan will be awarded an annual salary of $18,000 with $9.000 assigned to Kent. . The partners will be attributed Interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:23 basis, respectively. . Each partner is allowed to withdraw up to $5,000 per year. The net loss for the first year of operations is $30,000, and net Income for the subsequent year is $35,000. Each partner withdraws the each period. maximum amount from Required: Prepare schedules that compute the balances in each partner's capital account at the end of each of the first two years of partnership operations. Ending aital Ending Capital Balance Year Balance Year One Two $82,000 72,000 82,000 Prepare schedules that compute the balances in each partner's capital account at the end of Year One of partnership operations. Note: Amounts to be deducted should be indicated with minus sign. Beginning capital Net loss Drawings Ending capta ALLEGAN, BERRIEN, and KENT Statement of Partner's Capital For the Year One Allegan S S 82.000 S (10.000) (5,000 87.000 $ Berrien 72.000 S (30.000) (5.000) 37.000 $ Kent 62.000 5 (50,000) 9.000 47.000 Total 238.000 710.000 000) 151/000 Show less
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter19: Accounting For Partnerships
Section: Chapter Questions
Problem 7SPA
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Transcribed Image Text:Problem 14-11 (Algo) (LO 14-4, 14-5, 14-6)
A partnership begins its first year of operations with the following capital balances:
Allegan, Capital
Berrien, Capital
Kent, Capital
$82,000
72,000
82,000
According to the articles of partnership, all profits will be assigned as follows:
Allegan will be awarded an annual salary of $18,000 with $9.000 assigned to Kent
• The partners will be attributed Interest equal to 10 percent of the capital balance as of the first day of the year.
• The remainder will be assigned on a 5.23 basis, respectively.
. Each partner is allowed to withdraw up to $5,000 per year
The net loss for the first year of operations is $30,000, and net Income for the subsequent year is $35,000. Each partner withdraws the
maximum amount from the business each period.
Required:
Prepare schedules that compute the balances in each partner's capital account at the end of each of the first two years of partnership
operations.
Ending apital Ending Capital
Balance Year Balance Year
One
TWO
Prepare schedules that compute the balances in each partner's capital account at the end of Year One of partnership
operations.
Note: Amounts to be deducted should be indicated with minus sign.
Beginning capital
Net loss
Drawings
Ending capital
ALLEGAN, BERRIEN, and KENT
Statement of Partner's Capital
For the Year One
Allegan
S
S
82.000 $
(10.000)
(5,000)
87,000 $
Berrien
72.0005
(30.000)
(5.000)
37.000 $
Kent
62000 S
(30/0001
5.000
47,000 S
Total
2238.000
710.0001
15/0001
181/000
Show less4
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