C. Eastwood, A. North, and M. West are manufacturers’representatives in the architecture business. Their capitalaccounts in the ENW partnership for 20X1 were as follows:
| C. Eastwood, Capital |
| 9/1 | 8,500 | 1/1 | 31,300 |
| | 5/1 | 7,500 |
| | | |
| A. North, Capital |
| 3/1 | 9,300 | 1/1 | 41,900 |
| | 7/1 | 5,700 |
| | 9/1 | 4,800 |
| M. West, Capital |
| 8/1 | 13,800 | 1/1 | 51,900 |
| | 4/1 | 8,500 |
| | 6/1 | 4,900 |
Required:
For each of the following independent income-sharing agreements,prepare an income distribution schedule.
a. Salaries are $15,600 to Eastwood, $20,900 to North, and $18,700to West. Eastwood receives a bonus of 5 percent of net income afterdeducting his bonus. Interest is 10 percent of ending capitalbalances. Eastwood, North, and West divide any remainder in a 3:3:4ratio, respectively. Net income was $78,330. (Amounts thatare to be deducted from an individual partner's capital balanceshould be entered with a minus sign.)
eastwood north west total
profit ratio
ending capital
net income
salary
bonus
interest on ending capital balance
residual income
allocate
total
b. Interest is 10 percent of weighted-average capital balances.Salaries are $24,900 to Eastwood, $22,400 to North, and $26,100 toWest. North receives a bonus of 10 percent of net income afterdeducting the bonus and her salary. Any remainder is dividedequally. Net income was $70,030. (Do not round intermediatecalculations. Round the final answers to nearest whole dollar.Amounts that are to be deducted from an individual partner'scapital balance should be entered with a minussign.)
eastwood north west total
profit ratio
ending capital
net income
salary
bonus
interest on ending capital balance
residual income
allocate
total
c. West receives a bonus of 20 percent of net income afterdeducting the bonus and the salaries. Salaries are $21,600 toEastwood, $18,600 to North, and $16,000 to West. Interest is 10percent of beginning capital balances. Eastwood, North, and Westdivide any remainder in an 8:7:5 ratio, respectively. Net incomewas $95,620. (Do not round intermediate calculations.Amounts that are to be deducted from an individual partner'scapital balance should be entered with a minussign.)
eastwood north west total
profit ratio
ending capital
net income
salary
bonus
interest on ending capital balance
residual income
allocate
total
