net income for the year ended september 30 2012 is 99 000 the first 30 000 is alloca 559605

Elliot, Ford, and Grant formed the E, F, and G partnership. Elliot invested $24,000, Ford $34,000, and Grant $42,000. Elliot will manage the store; Ford will work in the store three quarters of the time; and Grant will not work.

Requirements

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

a. Net loss is $47,000, and the partnership agreement allocates 45% of profits to Elliot, 35% to Ford, and 20% to Grant. The agreement does not specify the sharing of losses.

b. Net income for the year ended September 30, 2012, is $99,000. The first $30,000 is allocated based on partner capital balances. The next $39,000 is based on service, with $29,000 going to Elliot and $10,000 going to Ford. Any remainder is shared equally.

2. Revenues for the year ended September 30, 2012, were $210,000, and expenses were $111,000. Under plan (b), prepare the partnership income statement for the year.

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