19 partnership income oas.2 Morrison and Amato have decided to form a partnership. They have agreed that Morrison is to invest $150,000 and that Amato is to invest $50,000. Morrison is to devote one-half time to the business and Amato is to devote full time, The following plans for the divi- sion of income are being considered: a. Equal division. In the ratio of original investments. In the ratio of time devoted to the business Interest of 12% on original investments and the remainder equally. €. Interest of 12% on original investments, salary allowances of $30,000 to Morrison and $64,000 to Amato, and the remainder équally nee £. Plan (@), except that Amato is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances. Instructions For each plan, determine the division off the met income under each of the following assumptions: (1) net income of $105,000|and (2) net income of $180,000, Present the data in tabular form, using the following columnar headings: $105,000 180,000 Plan Morrison Morrison “Amato £X 12-15 Admitting new partner with bonus oB).3 L. Bowers and V. Lipscomb are partners in Elegant Event Consultants, Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of cach partner are $96,000 and $40,000, respectively, prior to the revaluation, a. Provide the journal entry for the asset) revaluation. 'b. Provide the journal entry for Orti7’s| admission under the following independent situations 1. Ortiz purchased a 20% interest for $20,000. 2, Ortiz. purchased a 30% interest for $60,000,EX 12-17. Withdrawal of partner 0B).3 Justin Marley is to retire from the partnership of Marley and Associates as of March 31, the end of the current fiscal yeae. After closing the accounts, the capital balances of the partners are as follows: Justin Marley, $140,000; Cherrie Ford, $70,000; and LaMarcus Rollins, $60,000. They have shared net income and net losses in the catio of 3:2:2. The partners agree that the merchandise inventory should be increased by $15,500, and the allowance for doubtful accounts should be increased by $1,500. Marley agrees to accept a note for $100,000 in partial settlement of his ownership equity. The remainder of his claim is to be paid in cash. Ford and Rollins are to share equally in the net income or net loss of the new partnership. Journalize the entries to record (a) the adjustment of the assets to bring them into agree- ‘ment with current market prices and (b) the withdrawal of Marley from the partnership. EX 12-24 Statement of partnership liquidation 08.4, 5 After closing the accounts on July 1, prior to liquidating the parinership, the capital account balances of Gold, Porter, and Sims are $55,000, $45,000, and $20,000, respectively. Cash, fnoncash assets, and liabilities total $56,000, $96,000, and $32,000, respectively. Between July 1 and July 29, the noncash assets are sold for $90,000, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1. Prepare a statement of partnership liquidation for the period July 1-29, 2016. PR12-4A Admitting new partner 081.3 Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be admitted to the partnership on July 1 of the current year, in accordance with the following agreement: a, Assets and liabilities of the old partnership are to be valued at their book values as of June 30, except for the following: + Accounts receivable amounting to $2,500 are to be written off, and the for doubtful accounts is to be increased to 5% of the remai + Merchandise inventory is to be valued at $76,600. + Equipment is to be valued at $155,700. b. Anderson is to purchase $70,000 of the ownership interest of Tollins for $75,000 cash and to contribute another $45,000 cash to the partnership for 4 total ownership equity allowance ing accountsThe post-closing trial balance of Moshref!and Hollins as of June 30 is as follows: ‘Moshref and Hollins Post-Closing rial Balance ane 30,2016 { Debit Credi Balances Balances cor j 3,000 Accounts Receivable | 42500 Allowance for Doubsful Accounts 1,600 Merchandise Inventory 72,000 Prepaid insurance 3.000 Equipment | 180,500 Accumlated Deprecation—Equipment 43,100 Accounts Payable i 21,300 Notes Payable (current) 35,000, Musa Moshret, Capital | 120,000 Shaniqua Holins, Capital 85,000 306,009, Instructions | 1. Journalize the entries as of June 30 to record the revaluations, using a temporary ac- ‘count entliied Asset Revaluitions. The Walance in the accumulated depreciation account is to be eliminated. After journalizing the revaluations, close the balance of the asset revaluations account to the capital accounts of Musi Moshref and Shaniqua Hollins. 2, Journalize the additional entries to record Anderson's entrance to the partnership on July 1, 2016, |