Problem 12-4A (Algo) Partnership income allocation, statement of
partners' equity, and closing entries LO P2
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[The following information applies to the questions
displayed below.]
Mo, Lu, and Barb formed the MLB Partnership by making investments
of $72,900, $283,500, and $453,600, respectively. They predict
annual partnership net income of $481,500 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 $82,400
to Mo, $61,800 to Lu, and $93,000 to Barb; interest allowances of
10% on their initial capital investments; and the remaining balance
shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb.
Problem 12-4A (Algo) Part 2
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
$481,500; and that Mo, Lu, and Barb withdraw $37,600, $51,600, and
$67,600, respectively, at year-end. (Do not round
intermediate calculations. Enter all allowances as positive values.
Enter losses as negative values.)
- Required Information Problem 12 4a Algo Partnership Income Allocation Statement Of Partners Equity And Closing Entr 1 (31.64 KiB) Viewed 30 times