Allocate income to partners

Partnership Facts:

1. John, Alice and Dan are all general partners of apartnership.

2. John is the CEO of the partnership and is allocated a salaryof $90,000 per year.

3. Alice is the CFO of the partnership and is allocated a salaryof $72,000 per year.

4. Dan is not active in the partnership and is not allocated anysalary.

5. All partners are allocated an interest credit from earningsof 5% of their capital account balance before any allocations.

6. The remaining profit or loss after the above allocations issplit evenly three ways.

7. Capital account balance before allocations are asfollows:

John $150,000.

Alice $120,000.

Dan $258,000.

8. The net income before any allocations are made is$141,000.

9. Assume that no money is distributed at this time but earningsare allocated to partner capital accounts.

Allocate the net income to partners based on the abovepartnership terms and prepare allocation journal entries.

John

Alice

Dan

Totals

Question

Allocate income to partners

Partnership Facts:
1. John, Alice and Dan are all general partners of apartnership.
2. John is the CEO of the partnership and is allocated a salaryof $90,000 per year.
3. Alice is the CFO of the partnership and is allocated a salaryof $72,000 per year.
4. Dan is not active in the partnership and is not allocated anysalary.
5. All partners are allocated an interest credit from earningsof 5% of their capital account balance before any allocations.
6. The remaining profit or loss after the above allocations issplit evenly three ways.
7. Capital account balance before allocations are asfollows:
John $150,000.
Alice $120,000.
Dan $258,000.
8. The net income before any allocations are made is$141,000.
9. Assume that no money is distributed at this time but earningsare allocated to partner capital accounts.

Allocate the net income to partners based on the abovepartnership terms and prepare allocation journal entries.

	John	Alice	Dan	Totals

Allocate income topartners

Partnership Facts:
1. John, Alice and Dan are allgeneral partners of a partnership.
2. John is the CEO of thepartnership and is allocated a salary of $90,000 per year.
3. Alice is the CFO of thepartnership and is allocated a salary of $72,000 per year.
4. Dan is not active in thepartnership and is not allocated any salary.
5. All partners are allocatedan interest credit from earnings of 5% of their capital accountbalance before any allocations.
6. The remaining profit orloss after the above allocations is split evenly three ways.
7. Capital account balance beforeallocations are as follows:
John$150,000.
Alice$120,000.
Dan$258,000.
8. The net income before anyallocations are made is $141,000.
9. Assume that no money isdistributed at this time but earnings are allocated to partnercapital accounts.

Allocate the net income topartners based on the above partnership terms and prepareallocation journal entries.

	John	Alice	Dan	Totals

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