Question

LO2 PA12-4 Dividing Income, Journalizing, and Preparing Partners' Capital Statement A. Batt, B. Robbin, and E Catt are partners in the Bart R Catt partnership. Partnership net income 2009 is $46,000. Other relevant information follows: Capital 1/1/09 Capital Contributions Fixed Ratio Partner Dr 25% A. Batt B. Robbin E Catt $ 7,000 12,000 15,000 $4,400 3,300 2,200 $4,000 7.000 6,000 Required: 1. Allocate the net income to the partners based on fixed ratios. 2. Prepare the partners' capital statement at December 31, 2009.

Answer 1

1.

Fixed ratio = 25% : 30% : 45%

Net income = $46,000

Share of net income to A. Batt = 46,000 x 25%

= $11,500

Share of net income to B. Robbin = 46,000 x 30%

= $13,800

Share of net income to F. Catt = 46,000 x 45%

= $20,700

2.

Partner's capital statement

	A. Batt	B. Robbin	F. Catt
Capital, 1/1/09	7,000	12,000	15,000
Capital contribution	4,400	3,300	2,200
Net income	11,500	13,800	20,700
Partner's drawing	-4,000	-7,000	-6,000
Capital 12/31/09	$18,900	$22,100	$31,900

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