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.