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Accounting
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Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of $80,100, $311,500, and $498,400, respectively. They predict annual partnership net income of $523,500 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $85,600 to Mo, $64,200 to Lu, and $97,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb.
rev: 09_28_2017_QC_CS-102797
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Required information
[The following information applies to the questions displayed below.]
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of $80,100, $311,500, and $498,400, respectively. They predict annual partnership net income of $523,500 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $85,600 to Mo, $64,200 to Lu, and $97,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb.
rev: 09_28_2017_QC_CS-102797
Required information
[The following information applies to the questions displayed below.]
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of $80,100, $311,500, and $498,400, respectively. They predict annual partnership net income of $523,500 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $85,600 to Mo, $64,200 to Lu, and $97,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb.
rev: 09_28_2017_QC_CS-102797
2. Prepare a statement of partners equity showing the allocation of income to the partners assuming they agree to use plan (c), that income earned is $523,500, and that Mo, Lu, and Barb withdraw $42,400, $56,400, and $72,400, respectively, at year-end. (Do not round intermediate calculations. Enter all allowances as positive values. Enter losses as negative values.)
Record the entry to close the income summary account assuming the partners agree to use plan(c) and net income is $523,500.
Record the entry to close the partners' withdrawals accounts. (Mo, Lu, and Barb withdraw $42,400, $56,400, and $72,400, respectively, at year-end.)
Requlred Informetlon [The following information applies to the questions displayed below. Mo Meek, Lu Ling. and Barb Beck formed the MLB Partnership by making capital contributions of $80,100, $311,500, and $498.400, respectively. They predict annual partnership net income of $523,500 and are considering the following alternative plans of sharing income and loss: (a) equally: (b) in the ratio of their initial capital investments; or (c) salary allowances of $85,600 to Mo. $64,200 to Lu, and $.97,000 to Barb; interest allowances of 10% on their initial capital investments, and the balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb. Part 1 of 3 Requlrec: 1. Use the table to show how to distribute net income of $523,500 for the calendar year under each of the alternative plans being considered. (Do not round Intermedlete calculatlons.) e (Loss) Sharing Plan n (a) Net Income (loss) Balance allocated equally Balance of income (loss) Shares to the partners Mo Lu Barb Total S 523,500 S 523,500 Mo Lu Barb Total n (b) Net Income (loss) Balance allocated in proportion to 523,500 nitial investments Balance of income (loss) 523,500 Shares to the partners n (c) Net income (oss) Salary allowances Balance of income (loss) Interest allowances Balance of income (loss) Balance allocated Balance of income (loss) Shares of the partners Mo Lu Total 523,500
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