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Make a schedule to allocate income or loss to the partners

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Reference no: EM132820656

Adam, Bella, and Chris operate a partnership with a complex profit and loss sharing agreement. The average capital balance for Adam, Bella and Chris on December 31, 2020 is Rp120.000.000, Rp270.000.000, and Rp340.000.000, respectively. A 6% interest allocation is provided to each partner based on the average capital balance on December 31, 2020. Adam and Bella receive salary allocations of Rp40.000.000 and Rp50.000.000, respectively. If partnership net income is above Rp160.000.000, after the salary allocations are considered (but before the interest allocations are considered), Chris will receive a bonus of 10% of the income (pre-salary and interest, but net of the bonus). All residual income is allocated in the ratios of 2:2:6 to Adam, Bella, and Chris, respectively.

Required:

Problem a) a schedule to allocate income to the partners assuming that partnership net income for 2020 is Rp330.000.000.

Problem b) a journal entry to distribute the partnership's income to the partners (assume that an Income Summary account is used by the partnership).

Problem c) a schedule to allocate income or loss to the partners assuming that the partnership incurs a net loss of Rp26.200.000 for 2020.

Problem d) a journal entry to distribute the partnership's loss to the partners (assume that an Income Summary account is used by the partnership).

Reference no: EM132820656

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