Brewer and Tony have a partnership agreement which includes the following provisions regarding sharing profit or loss:
1. A salary allowance of $30,000 to Brewer and $15,000 to Tony.
2. An interest allowance of 10% on capital balances at the beginning of the year.
3. The remainder to be divided 30% to Brewer and 70% to Tony.
The capital balances on January 1, 2013, for Brewer and Tony were $80,000 and $100,000, respectively. During 2013, the Brewer and Tony Merchandising Partnership had sales of $330,000, cost of goods sold of $190,000, and operating expenses of $60,000.
Instructions
Prepare an income statement for the Brewer and Tony Merchandising Partnership for the year ended December 31, 2013. As a part of the income statement, include a Division of Profit to each of the partners.

Question

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The Answer of Brewer and Tony have a partnership agreement which includes the following provisions regarding sharing profit or loss:
1. A salary allowance of $30,000 to Brewer and $15,000 to Tony.
2. An interest allowance of 10% on capital balances at the beginning of the year.
3. The remainder to be divided 30% to Brewer and 70% to Tony.
The capital balances on January 1, 2013, for Brewer and Tony were $80,000 and $100,000, respectively. During 2013, the Brewer and Tony Merchandising Partnership had sales of $330,000, cost of goods sold of $190,000, and operating expenses of $60,000.
Instructions
Prepare an income statement for the Brewer and Tony Merchandising Partnership for the year ended December 31, 2013. As a part of the income statement, include a Division of Profit to each of the partners.

Brewer and Tony Have a Partnership Agreement Which Includes the Following