compute the partners rsquo shares of profits and losses under each of the following 559601

Allocating profits and losses to the partners, preparing partnership financial statements

Edwards, French, and Gill formed the E, F and Gill partnership. Edwards invested $21,000; French, $35,000; and Gill, $44,000. Evans will manage the store; Furr will work in the store three quarters of the time; and Gill will not work.

Requirements

1. Compute the partners’ shares of profits and losses under each of the following plans:

a. Net loss is $42,000, and the partnership agreement allocates 45% of profits to Edwards, 35% to French, and 20% to Gill. The agreement does not discuss the sharing of losses b. Net income for the year ended September 30, 2012, is $97,000. The first $25,000 is allocated on the basis of partner capital balances. The next $48,000 is based on service, with $38,000 going to Edwards and $10,000 going to French. Any remainder is shared equally.

2. Revenues for the year ended September 30, 2012, were $209,000, and expenses were $112,000. Under plan (b), prepare the partnership income statement for the year

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