Question : 72. Norma and Marilyn partners. The partnership agreement provides that Norma : 1197641

72. Norma and Marilyn are partners. The partnership agreement provides that Norma will receive a salary of $30,000 and Marilyn will receive a salary of $50,000. These salaries were paid to the partners during 2013 and were charged to the partners’ drawing accounts. Both partners also receive 8 percent on their capital balances at the beginning of the year. The balance of any remaining profits or losses is divided equally. The beginning capital account balances for 2013 were Norma, $80,000, and Marilyn, $40,000. At the end of the year, the partnership has a net income of $90,000.

1. What amount of net income or loss will be allocated to Norma?

2. What amount of net income or loss will be allocated to Marilyn?

73. Walters and Kim are partners. The partnership agreement provides for salary allowances of $26,000 for Walters and $22,000 for Kim and for interest of 10 percent on each partner’s invested capital at the beginning of the year. The balance of any remaining profits or losses is to be divided 40 percent to Walters and 60 percent to Kim. On January 1, 2013, the capital account balances were Walters, $75,000, and Kim, $95,000. Net income for the year was $72,000.

1. On page 10 of a general journal, record the following entries on December 31, 2013. Omit descriptions.

A) Record the salary allowances for the year.

B) Record the interest allowances for the year.

C) Record the division of the balance of net income.

D) Close the drawing accounts into the capital accounts. Assume that the partners have withdrawn the full amount of their salaries.

2. Prepare a schedule showing the division of net income to the partners as it would appear on the income statement for 2013.

74. Bryce and Kendall are partners. The partnership agreement provides for salary allowances of $52,000 for Bryce and $44,000 for Kendall and for interest of 10 percent on each partner’s invested capital at the beginning of the year. The balance of any remaining profits or losses is to be divided 40 percent to Bryce and 60 percent to Kendall. On January 1, 2013, the capital account balances were Bryce, $150,000, and Kendall, $190,000. Net income for the year was $144,000.

1. On page 22 of a general journal, record the following entries on December 31, 2013. Omit descriptions.

A) Record the salary allowances for the year.

B) Record the interest allowances for the year.

C) Record the division of the balance of net income.

D) Close the drawing accounts into the capital accounts. Assume that the partners have withdrawn the full amount of their salaries.

2. Prepare a schedule showing the division of net income to the partners as it would appear on the income statement for 2013.

75. Nancy Conradt and Chris Russell are partners who share profits and losses in the ratio of 60:40, respectively. On December 31, 2013, they decide that Russell will sell one-half of his interest to Pam Ortega. At that time, the balances of the capital accounts are $500,000 for Conradt and $700,000 for Russell. The partners agree that before the new partner is admitted, certain assets should be revalued. These assets include merchandise inventory carried at $411,200 revalued at $403,600, and a building with a book value of $260,000 revalued at $450,000. On page 10 of a general journal, record the revaluation entries. Omit descriptions. Then, determine the capital balances of the two existing partners after the revaluation is made.

76. Brian Colt and Karen Randall are partners who share profits and losses in the ratio of 70:30, respectively. On December 31, 2013, they decide that Randall will sell one-half of her interest to Jane Wu. At that time, the balances of the capital accounts are $70,000 for Colt and $30,000 for Randall. The partners agree that before the new partner is admitted, certain assets should be revalued. These assets include merchandise inventory carried at $11,000 revalued at $10,000, and a building with a book value of $60,000 revalued at $70,000. On page 10 of a general journal, record the revaluation entries. Omit descriptions. Then, determine the capital balances of the two existing partners after the revaluation is made.