Question

Sadie and Sam share income equally. For the current year, the partnership net income is $40,000. Sadie made withdrawals of $14,000 and Sam made withdrawals of $15,000. At the beginning of the year, the capital account balances were: Sadie, Capital, $42,000; Sam, Capital, $58,000. Sam's capital account balance at the end of the year is Oa. $63,000 Ob. $78,000 Oc. $43,000 Od. $93,000

Answer 1

solution : Paget ood. option "q" is correct ansiner $ 63,000 be cause reason of following 10 calculation of sam's capital balance the End of the at year : — Beginning Balance $ 58,000 15 Addi- - Net $ 20,000 Income $ 40,000x1 cessfa withdrawals = $ $ 115,000) 63,000 0.2 Journal Entry ago 30 Account B Explanation Debit credit Account Receivable 43,300 (4-7,000 - 3,700 Equipment 167,700 Allowance for Doubt- Ioo ful Account Jessee capital Account 109. Soo (Being, capital Introduce recorded) cash 21,50o merchandise Inventory. 48,000 Tim capital 169,500 (Being capital Introduction 12 Orecorded of tim Account 315

2. Page 2 Income $410,000 & Rodgers winter Total Allowa salary - 25,000 55,000 30,ooo nce Interest Allowance 7,200 10,800 18,000 (60,000x12%) (90,000 X/200) Remaing Income 18,500 +8,500 37,000 { $1,10,000-$55,000 - $ 18000) 2. Total 50,700 59,300 410,000 b] Net Income $ 65,000 $ $ $ salary Allowance 25,000 30,000 55,000 interest (60,000 X/20%. 7,200 10800 18,000 190,000 X 12 %) Total Income 32,200 40.800 73,000 lessi- Excess Allowance (4000)|(4000)|(8000) (4 73000 - 65000) 2 Net Income 28200 136,800 65,000 30