Reference no: EM133417090
Question: Razul and Amy decidedto start a partnership calledSA Consulting on January 1, 2020. Each of them contributed a number of items to the partnership, which are listed below. All tangible assets are listedat their marketvalue.
Razul Amy
On March 1, Razul and Amy added a new partner to the business,Sheila. Sheila will contribute $133,000and receive a 36% share of the business. Use the capitalbalances from January1 to determine any bonuses.Assume the existingpartners will split any bonus evenly.
During the year, Razul and Amy withdrew $21,300and $18,800 respectively and the businessreported a net income of $433,600. Their partnership agreement provided for sharingof net income (loss) on the following basis:
Salary of $49,800 is allocated to Razul, $46,300to Amy, and $41,300 to Sheila.
Interest is allocated at 7% of each partner's opening capital balance.
Remainder is shared where Razul gets 32%, Amy gets 36%, and Sheila gets 32%.
Prepare the journal entriesto record the contributions of each partnerto start the partnership.
Prepare a scheduleshowing the changesin capital and ending capitalbalances after the admission of Sheila.
Prepare the journal entryto record the admission of the new partner on March 1.
Prepare the journal entryto record the partner withdrawals of cash.
Prepare the journal entriesto record the distribution of net income and the closing of the withdrawals accounts. Assume revenuesand expenses have been closed to the income summary account.
Razul and Amy decidedto start a partnership calledSA Consulting on January 1, 2020. Each of them contributed a number of items to the partnership, which are listed below. All tangible assets are listedat their marketvalue.
Razul Amy
On March 1, Razul and Amy added a new partner to the business,Sheila. Sheila will contribute $133,000and receive a 36% share of the business. Use the capitalbalances from January1 to determine any bonuses.Assume the existingpartners will split any bonus evenly.
During the year, Razul and Amy withdrew $21,300and $18,800 respectively and the businessreported a net income of $433,600. Their partnership agreement provided for sharingof net income (loss) on the following basis:
Salary of $49,800 is allocated to Razul, $46,300to Amy, and $41,300 to Sheila.
Interest is allocated at 7% of each partner's opening capital balance.
Remainder is shared where Razul gets 32%, Amy gets 36%, and Sheila gets 32%.
Prepare the journal entriesto record the contributions of each partnerto start the partnership.
Prepare the journal entriesto record the distribution of net income and the closing of the withdrawals accounts. Assume revenuesand expenses have been closed to the income summary account.