Grant & Frost, both of whom are accountants, form a partnership with Grant investing $100,000...
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Accounting
Grant & Frost, both of whom are accountants, form a partnership with Grant investing $100,000 and Frost, $80,000. They agree to share Net Income as follows: salary allocations of $80,000 to Grant and $60,000 to Frost; interest allocation of 15% on their initial investments; any partnership net income in excess of the amount required to cover the interest and salary allowances to be divided 60% to Grant and 40% to Frost. Use the information from the following Trial Balance to do the following"
Grant & Frost
Trial balance
For the Year Ended December 31, 2018
Account name Debit Credit Bank $15,000 Accounts Receivable 100,000 Allowance for bad debt 10,000 Inventory 40,000 Equipment 80,000 Accumulated Depreciation 20,000 Accounts Payable 78,000 Bank Loan 138,000 Capital, Grant 100,000 Drawings, Grant 30,000 Capital, Frost 80,000 Drawings, Frost 30,000 Sales 647,000 Cost of Goods Sold Expense 400,000 Selling Expenses 100,000 Administrative Expenses 100,000 $853,400 $853,400
1). Prepare a Schedule of Division of Partnership Net Income
2). Prepare a Schedule of Partnership Equity
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