Dividing Partnership Net Income
Required:
Steve Jack and Chelsy Stevens formed a partnership, dividingincome as follows:
- Annual salary allowance to Jack of $87,360.
- Interest of 6% on each partner's capital balance on January1.
- Any remaining net income divided to Jack and Stevens, 1:2.
Jack and Stevens had $63,000 and $87,000, respectively, in theirJanuary 1 capital balances. Net income for the year was $156,000.How much is distributed to Jack and Stevens?
Note: Compute partnership share.
Jack: $
Stevens: $
Revaluing and Contributing Assets to a Partnership
Demarco Lee invested $28,000 in the Camden & Saylerpartnership for ownership equity of $28,000. Prior to theinvestment, equipment was revalued to a market value of $294,000from a book value of $249,000. Kevin Camden and Chloe Sayler sharenet income in a 1:3 ratio.
Required:
a. Provide the journal entry for therevaluation of equipment.
For a compound transaction, if an amount box does not require anentry, leave it blank.
b. Provide the journal entry to admit Lee.
