Horngren’s Accounting, Volume 2, 11th Canadian Edition by Tracie Miller-Nobles Solution manual

             Warsteiner ($432,000 ´ 0.30)            0129,600  432,000
     Balance408,400235,600 644,000
       Less: Withdrawals 172,800128,000   300,800
       Ending capital balance$235,600   $107,600  $343,200
 

Req. 1                                                           (25–30 min.) P12-2A
Sasso, Schwimmer, and Perry
Allocation of Profits and Losses
 SassoSchwimmerPerryTotal
a.   Total (net loss)   $(70,500)
       Allocation to the partners:    
             Sasso ($70,500 ´ 0.45)$(31,725)   
             Schwimmer ($70,500 ´ 0.35) $(24,675)  
             Perry ($70,500 ´ 0.20)  $(14,100) 
                  Total   $(70,500)
       Net loss left for allocation                                          $           0
       Net loss allocated to partners$(31,725)$(24,675)$(14,100)$(70,500)
     
b.   Total net income   $136,500
       Allocation to the partners:    
       Sharing of first $45,000 profit based on capital investments:    
             Sasso ($60,000/
                  $360,000 ´ $45,000)$     7,500   
             Schwimmer ($120,000/
                  $360,000 ´ $45,000) $  15,000  
             Perry ($180,000/
                  $360,000 ´ $45,000)  $22,500 
             Total     45,000
       Net income left for allocation   91,500
       Sharing of next $75,000 of profit based on service:    
             Sasso45,000   
             Schwimmer 30,000  
                  Total     75,000
       Net income left for allocation   16,500
     
       Remainder shared equally:    
             Sasso ($16,500 ´ 1/3)5,500   
 Schwimmer ($16,500 ´ 1/3) 5,500  
             Perry ($16,500 ´ 1/3)  5,500 
                  Total     16,500
       Net income left for allocation                                                 0