Please assist with attached homework problem. Quick and simple for accounting experts. Allocate income to partners
1. John, Alice and Dan are all general partners of a partnership.
2. John is the CEO of the partnership and is allocated a salary of $90,000 per year.
3. Alice is the CFO of the partnership and is allocated a salary of $72,000 per year.
4. Dan is not acTve in the partnership and is not allocated any salary.
5. All partners are allocated an interest credit from earnings of 5% of their capital account balance before any allocaTons.
6. ±he remaining pro²t or loss a³er the above allocaTons is split evenly three ways.
7. Capital account balance before allocaTons are as follows:
8. ±he net income before any allocaTons are made is $141,000.
9. Assume that no money is distributed at this Tme but earnings are allocated to partner capital accounts.
Allocate the net income to partners based on the above partnership terms and prepare allocaTon journal entries.
This question was answered on: Sep 21, 2023
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