Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Mus Works. Adjusted trial balance information for the year ended December 31, 2020, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital Brian Adams, withdrawals Cash Equipment Expenses Balance $ 11,500 95,000 42,000 80,000 232,000 340,000 122,000 Account Keith Willians, capital** Keith Williams, withdrawals Note payable, due May 2022*** office supplies Revenues Utilities payable *Assume all account balances are normal. "The partners made no investments during the year. ***$60,000 of the note payable is due in May 2021. Balance $ 45,300 70,000 160,000 36,000 520,000 3,200 Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $110,000 per year salary allowance to Williams, a $170,000 per year salary allowance to Adams, and the remainder on a 3.2 ratio. (Leave no cell blank. Enter "0" when the answer is zero.)

Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Mus Works. Adjusted trial balance information for the year ended December 31, 2020, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital Brian Adams, withdrawals Cash Equipment Expenses Balance $ 11,500 95,000 42,000 80,000 232,000 340,000 122,000 Account Keith Willians, capital Keith Williams, withdrawals Note payable, due May 2022* office supplies Revenues Utilities payable *Assume all account balances are normal. "The partners made no investments during the year. ***$60,000 of the note payable is due in May 2021. Balance $ 45,300 70,000 160,000 36,000 520,000 3,200 Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $110,000 per year salary allowance to Williams, a $170,000 per year salary allowance to Adams, and the remainder on a 3.2 ratio. (Leave no cell blank. Enter "0" when the answer is zero.)

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter28: Income Taxati On Of Trusts And Estates

Section: Chapter Questions

Problem 8DQ

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