Instructions: Prepare the allocation of income by partners in each case. Prepare the breakdown of...
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Instructions: Prepare the allocation of income by partners in each case. Prepare the breakdown of income in T Accounts of the partners
Susan Otero and Kendra Villas opened an advertising business as a partnership. They have the following agreements. Each case is independent of the other. You must prepare T-accounts for the capital of each partner for each case. 60 points. (15 pts each case)
Case #3 Income of $40,000 a) Salaries 15,000 each partner b) $20,000 productivity bonus for Otero c) They receive 15% interest on the capital invested. Otero capital is $80,000 and Villas capital is $80,000 d) Remaining income in 2:1 e) For T-account, Villas withdrew $5,000 for personal use
Case #4 Income of $200,000 a) Salaries of $25,000 for Otero and $15,000 for Villas b) 5,000 Villa Productivity Bonus c) 20% productivity bonus for Otero d) 10% interest on the invested capital. Otero capital $60,000 and Villas capital $75,000. e) Remaining income in 45% for Otero and 55% for Villas
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