50.1K

Verified Solution

Link Copied!

M. Michael and S. Colier combine their individual sole proprietorships to start the Michael - Collier partnership. M. Michael and S, Collier invest in the partnership as follows Book Value Fair Value Michael Collier Michael Collier Cash $ 20400 $ 6600 20400 6600 10000 5400 10000 5400 Accounts Recevable Allowance for Doubtful Accounts (1600) (650) (2010) (820) 13100 14400 23600 Equipment 8600 Accumulated Depreciation (3900) B300) The entries to record the investment will include a credit to Which of the following statements is correct? O Salaries to partners and interest on partners' capital are expenses of the partnership. O Interest on partners' capital is an expense of the partnership but not salaries to partners. O Salaries to partners are expenses of the partnership but not interest on partners' capital. ONeither salaries to partners nor interest on partners' capital are expenses of the partnership. The partnership agreement of Matthew, Gise, and Bosco provides for the following income ratio: (a) Matthew, the managing partner, receives a salary allowance of $ 102000, (b) each partner receives 15% interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Matthew $ 597000, Gise $ 1191000, and Bosco $ 1792000. If partnership net income is $ 723000, the amount allocated to Gise should be: O$ 150650 O $ 206650 $ 178650 $ 241000 Question 44 of 82 -/1 E View Policies Current Attempt in Progress Partners David and Dickens have capital balances in a partnership of $166000 and $246000, respectively. They agree to share profits and losses as follows David Dickens As salaries $40000 $49000 As interest on capital at the beginning of the year 10% 10% Remaining profits or losses 50% 50% It income for the year was $120000, what will be the allocation of income to David? @ $51500 $41200 $65100 $56600

Answer & Explanation Solved by verified expert

See Answer