Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. question 22 colin and jane form a partnership on 1

QUESTION 22 Colin and Jane form a partnership on 1 July 2016. Colin’s contribution is $20,000 cash...

70.2K

Verified Solution

Question

Accounting

QUESTION 22

Colin and Jane form a partnership on 1 July 2016.

Colin’s contribution is $20,000 cash and $80,000 inventory.Jane’s contribution is $16,000 cash and land that cost $125,000 buthas a market value of $200,000.

Required:

  1. Prepare the necessary journal entries to set up the partnershipon 1 July 2016.

The partnership of Colin and Jane has been in operation for onemonth and they have made a net profit of $23,000.

The partnership agreement provides for the following:

  • An interest allowance of 5% of their capital balances.

(There has been no change in thepartners’ capital balance since the partnership was set up).

  • Salaries of $2,300 for Colin and $1,900 for Jane.
  • Residual profits are to be divided equally.

Required:

  1. Calculate the amount of profit allocated to each partnershowing all workings.
  1. Prepare the general journal entries to allocate the profit forthe month to each of the partners.

Answer & Explanation Solved by verified expert
4.5 Ratings (913 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

Sunny Corporation expects to have the following balances on July 1, 2020: Cash, $3,000; Accounts receivable,...

Chemistry
1.2K views

As a food chemist for a major potato chip company, you are responsible for determining the...

Physics
1.2K views

Tris, (HOCH2)3CNH2 (pKb = 5.91), a very common buffer for studying biochemical processes, is prepared by...

Physics
1.2K views

Two masses are attracted by a gravitational force of 19.0 N.What will the force of...

Geometry
1.2K views

Joey wishes to contribute three items to a gift box He aims to pick from...

Geometry
1.2K views

Find the lateral area of the cylinder The lateral area of the given cylinder ism...

Basic Math
1.2K views

into and out of the valley They take the measurements shown Determine the height of...

Calculus
1.2K views

Find the area of the region bounded by the graph of f x sin x...

Accounting
1.2K views

Auditing Match each of the following items with the correct...

Accounting
1.2K views

A list of accounts and their balances of ONeills Psychological Services, at its year end...

Accounting
1.2K views

Calculate the preferred and common dividend per share (in $) for the company. (If there...

Finance
1.2K views

1. Constructing a risk-neutral probability binomial short-term interest rate model (40 points) la. We observe...