1) Aikman (beginning capital, $60,000) and Rory (beginning capital $90,000) are partners. During 2012, the partnership earned net income of $70,000, and Aikman made drawings of $18,000 while Rory made drawings of $24,000
a) Assume the partnership income-sharing agreement calls for income to be divided 45% to Aikman and 55% to Rory. Prepare the journal entry to record the allocation of net income.
b) Assume the partnership income-sharing agreement calls for income to be divided with a salary of $30,000 to Aikman and $25,000 to Rory, with the remainder divided 45% to Aikman and 55% to Rory. Prepare the journal entry to record the allocation of net income.
c) Assume the partnership income-sharing agreement calls for income to be divided with a salary of $40,000 to Aikman and $35,000 to Rory, interest of 10% on beginning capital, and the remainder divided 50-50. Prepare the journal entry to record the allocation of net income.
d) Compute the partners ending capital balances under the assumption in part “c”
2) For Starrite Co, beginning capital balances on January 1, 2012, are Donna Noble $20,000 and Amy Bond $18,000. During the year, drawings were noble $8,000 and Bond $5,000. Net income was $30,000, and the partners share income equally.
a) Prepare the partner’s capital statements for the year
b) Prepare the owners equity section of the balance of the balance sheet at December 31, 2012.
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