Reference no: EM132587402

Questions -

Q1. Kellan, Willa, and Sami are partners with capital balances of $90,000, $70,000, and $50,000, respectively. The partners agreed to share profits and losses as follows:

Salary allowances of $5,000 to Kellan, $10,000 to Willa, and $15,000 to Sami.

Interest allowances of 10% on beginning-of-year capital balances Balance to be divided equally.

If profit for the year is $170,000, calculate each partner's share and prepare the appropriate journal entry to close the Income Summary to the capital accounts.

Q2. William and Christie form a partnership by investing $60,000 and $40,000 respectively. Their partnership agreement stipulates that William will receive an annual salary allowance of $6,000, and both partners will receive an interest allowance of 10% on their capital investment. Any profit remaining is to be allocated 60% to William, and 40% to Christie. Profit for their first year of operations is $40,000. Prepare the entry to close Income Summary.

Q3. On November 16, 2015, Williams Industrial gave Phillip Co. a 90-day, 8%, $80,000 note payable to extend a past due account payable.

Prepare the journal entry for Williams Industrial to record payment of the note on Feb 14, 2016. Williams Industrial recorded a December 31st year end adjusting entry.

Q4. On November 16, 2015, Kinsmen Sports gave Source for Sports a 120-day, 8%, $120,000 note payable to extend a past due account payable.

What amount of interest expense should Source for Sports report for calendar 2015?