Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

تمرين 41

Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions of $67,500, $262,500, and $420,000, respectively. They predict annual partnership net income of $450,000 and are considering the following alternative plans of sharing income and loss: ( a ) equally; ( b ) in the ratio of their initial capital investments; or ( c ) salary allowances of $80,000 to Bill, $60,000 to Bruce, and $90,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Bill, 40% to Bruce, and 40% to Barb..
Required
1. Prepare a table with the following column headings.

Use the table to show how to distribute net income of $450,000 for the calendar year under each of the alternative plans being considered. (Round answers to the nearest whole dollar.)
2. Prepare a statement of partners' equity showing the allocation of income to the partners assuming they agree to use plan ( c ), that income earned is $209,000, and that Bill, Bruce, and Barb withdraw $34,000, $48,000, and $64,000, respectively, at year-end.
3. Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan ( c ) and that net income is $209,000. Also close the withdrawals accounts.