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question p15 1 day and night formed an accounting partnership in 2008 capital transa 4292366

Question

P15-1. Day and Night formed an accounting partnership in 2008.Capital transactions for Day and Night during 2008 are asfollows:

Date        Transaction                            Amount

Day

1/1            Beginningbalance                  $75,000

4/1           Withdrawal                                 18,750

6/1            Investment3                               7,500

11/1          Investment                                18,750

Night

1/1              Beginningbalance                 $37,500

7/1            Investment                               18,750

10/1           Withdrawal                                 9,375

Partnership net income for the year ended December 31, 2008; is$68,400 before considering salaries or interest.

Required:

Determine the amount of profit that is to be allocated to Dayand Night in accordance with each of the following independentprofit-sharing agreements:

1. Day and Night failed to provide a profit-sharing arrangementin the articles of partnership and fail to compromise on anagreement.

2. Net income is to be allocated 60% to Day and 40% toNight.

3. Net income is to be allocated in the ratio of ending capitalbalances.

4. Net income is to be allocated in the ratio of average capitalbalances.

5. Interest of 15% is to be granted on average capital balances,salaries of $15,000 and $8,250 are to be allocated to Day andNight, respectively, and the remainder is to be dividedequally.

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