Reference no: EM132624376

Question - A- S, M and Z form a partnership and agree to allocate income equally after recognition of 10% interest on beginning capital balances and monthly salary allowances of $ 2,000 to S and 1,500 $ to Z , Capital balances on January 1 were as follow : S $ 40,000 , M $25,000 and Z $30,000 .

Required -

Calculate the net income (loss) allocation to each partner if the Net losses for the year is $ 38,300 and Journalize the allocation of net income.

After you solve the questions your answer must include the following items:

Explain in details the journal entries ( why its recorded in debit or credit side ) and the nature of account Dr or Cr and its classification Assets , liabilities , owner's equity , Revenue or expenses .

Define partnerships and explain it's types, characteristics and compare it with similar organizations .

Explain the methods of profits and losses allocation.

Illustrate how the partners can admit or withdraw from the partnerships.

Define The Fair value and re-evaluation for assets and liabilities.

Explain how can grant a bonus to old and new partner.