Horngren’s Accounting, Volume 2, 11th Canadian Edition by Tracie Miller-Nobles Solution manual
Jan.1Cash 12,000
Equipment 29,000
Buildings 90,000
Land 78,000
Accounts Payable 35,000
Note Payable 17,000
Chris Hunts, Capital 157,000
1Cash 18,500
Equipment 47,500
Buildings 110,000
Land 80,000
Accounts Payable 35,000
Note Payable 28,000
Carol Lo, Capital 193,000
Req. 2
CHRIS AND CAROL PARTNERSHIP
Balance Sheet
January 1, 2019
Assets Liabilities
Cash$ 30,500Accounts payable$ 70,000
Equipment76,500Note payable 45,000
Buildings200,000 Total liabilities$115,000
Land158,000
Partners’ Equity
Chris Hunts, capital$157,000
Carol Lo, capital 193,000
Total partners’ equity 350,000
Total assets$465,000Total liabilities and equity$465,000
(15–20 min.) E12-6
Partners’ shares of net income and net loss:
Net Income (Net Loss)
DanoloGoldmanTotal
a. Half to each partner$(62,400)$(62,400)$(124,800)
b. Danolo ($96,000/$264,000 ´ $105,600)$ 38,400
Goldman ($168,000/$264,000 ´ $105,600) $ 67,200$105,600
c. Total net income $264,000
Sharing of first $132,000 based on capital
balances:
Danolo ($96,000/$264,000 ´ $132,000)$ 48,000
Goldman ($168,000/$264,000 ´ $132,000) $ 84,000 132,000
Net income left for allocation 132,000
Sharing based on service:
Danolo ($100,000 ´ 0.40)40,000
Goldman ($100,000 ´ 0.60) 60,000 100,000
Net income left for allocation 32,000
Balance shared equally:
Danolo ($32,000 ´ 0.5) 16,000
Goldman ($32,000 ´ 0.5) 16,000 32,000
Net income left for allocation $ 0
Net income allocated to the partners$104,000$160,000$264,000
(10–15 min.) E12-7
Each partner’s share of the $92,000 net income for the year:
HarperChevesCalderonTotal
Total net income $92,000
First, interest on capital investments:
Harper ($20,000 / 100,000 × 40,000)$ 8,000
Cheves ($30,000 / 100,000 × 40,000) $12,000
Calderon ($50,000 / 100,000 × 40,000) $20,000
Total $40,000
Net income remaining for allocation $52,000
Second, based on service: