Partner Bonuses, Statement of Partners\' Equity
The following additional partner transactions took place during the year:
1. In early January, Randy Campbell is admitted to the partnership by contributing $75,000 cash
for a 20% interest.
2. Net income of $150,000 was earned in 2014. In addition, Dennis Overton received a salary
allowance of $40,000 for the year. The three partners agree to an income-sharing ratio equal to
their capital balances after admitting Campbell.
3. The partners\' withdrawals are equal to half of the increase in their capital balances from salary
allowance and income.
Solution
solution:-
Capital ratio:-180000:120000:75000 i.e :12:8:5ParticularDennisBenRandyOpening
Capital$180,000$120,000$75,000+Salary$40,00000+income sharing (150,000-
40,000)$52800$35200$22000-Drawings$46400$17600$11000Closing
capital$226,400$137600$86000.
Mattingly "AI & Prompt Design: The Basics of Prompt Design"
Partner Bonuses, Statement of Partners EquityThe following addit.pdf
1. Partner Bonuses, Statement of Partners' Equity
The following additional partner transactions took place during the year:
1. In early January, Randy Campbell is admitted to the partnership by contributing $75,000 cash
for a 20% interest.
2. Net income of $150,000 was earned in 2014. In addition, Dennis Overton received a salary
allowance of $40,000 for the year. The three partners agree to an income-sharing ratio equal to
their capital balances after admitting Campbell.
3. The partners' withdrawals are equal to half of the increase in their capital balances from salary
allowance and income.
Solution
solution:-
Capital ratio:-180000:120000:75000 i.e :12:8:5ParticularDennisBenRandyOpening
Capital$180,000$120,000$75,000+Salary$40,00000+income sharing (150,000-
40,000)$52800$35200$22000-Drawings$46400$17600$11000Closing
capital$226,400$137600$86000
