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

         Valente ($200,000 ´ 0.35)  $(70,000) 
                  Total   ($200,000)
       Net loss left for allocation                                          $            0
       Net loss allocated to partners$(80,000)$(50,000)$(70,000)$(200,000)
(Continued on next page)

                                                                          (continued) P12-2B
Req. 1
Berlo, Felini, and Valente
Allocation of Profits and Losses
 BerloFeliniValenteTotal
b.   Total net income   $354,000
       Allocation to the partners:    
       Sharing of first $150,000 of profit based on capital investments:    
             Berlo ($30,000/$120,000 ´ $150,000)$37,500   
             Felini ($40,000/$120,000 ´ $150,000) $50,000  
             Valente ($50,000/ $120,000 ´ $150,000)  $62,500 
             Total     150,000
       Net income left for allocation   204,000
       Sharing of next $72,000 of profit based on service:    
             Berlo56,000   
             Felini 16,000  
                  Total      72,000
       Net income left for allocation   132,000
     
       Remainder shared equally:    
             Berlo ($132,000 ´ 1/3)44,000   
             Felini ($132,000 ´ 1/3) 44,000  
             Valente ($132,000 ´ 1/3)  44,000 
                  Total   132,000
       Net income left for allocation                                                   0
       Net income allocated to partners$137,500$110,000$106,500$354,000
                                                                        (continued) P12-2B
Req. 2
BERLO, FELINI, AND VALENTE
Income Statement
For the Year Ended January 31, 2020
Revenue$1,014,000
Expenses  660,000
Net income$  354,000
  
Allocation of earnings 
       Berlo$  137,500
       Felini110,000
       Valente   106,500
Total$  354,000
Req. 3