Student Name:

Class:
Problem 12-02A
Watts and Thomas
Preliminary Calculations
Plans a and c Percentages based on initial investments:
Watts
Thomas
Plan b

Percentages based on time:

Watts
Thomas

Plans c and d Salary allowance

Thomas
Plan d

Interest allowances
Watts
Thomas

Income (Loss)
Sharing
Plan
Calculations
(a)
40% x $18,000 loss

Year 1

(b)

(c)

Salary allowance

Totals
(d)

Salary allowance
Interest allowances
50% x ($18,000 loss +
$36,000 salary + $7,500 interest)

Watts

Thomas

Student Name:
Class:
Problem 12-02A
Income (Loss)
Sharing
Plan
Calculations
(a)
40% x $45,000 income

Year 2
Watts

Thomas

Watts

Thomas

(b)

(c)

Salary allowance

Totals
(d)

Salary allowance
Interest allowances

Totals

Income (Loss)
Sharing
Plan
Calculations
(a)
40% x $75,000 income

(b)

(c)

Salary allowance

Totals
(d)

Salary allowance
Interest allowances

Totals

Year 3

Given Data P12-02A:

Watts and Thomas's Alternative Plans
to Share Net Incomes and Losses
Plan A - in the ratio of initial investment
Watts - initial investment
Thomas - initial investment

$ 30,000
45,000

Plan B - in proportion to time devoted to business:

Watts - half time
Thomas - full time
Plan C - salary to Thomas and balance in
ratio of initial investment
Proposed salary to Thomas

3,000

Plan D - salary to Thomas, interest on their

initial investments, balance equally
Proposed salary to Thomas
Proposed interest rate

3,000
10%

Expected net income (loss):

Year 1
Year 2
Year 3

$(18,000)
45,000
75,000

Check figure:
Plan D, Year 1, Thomas's share

$ 9,750

Student Name:
Class:
Problem 12-03A
BBB PARTNERSHIP
Income/Loss
Sharing
Plan
Calculations

Will

a)

$210,000/3

b)

$210,000x($142,500/$475,000)

Trevor

Barb

Totals

Barb

Total

Total allocated
c)

Net income
Salary allowances
Balance of income
Interest allowances
Balance of income
Balance allocated
Balance of income
Shares of partners

BBB PARTNERSHIP
Statement of Partners' Equity
For Year Ended December 31
Will
Beginning capital balances
Plus:
Investments by owners
Net income:
Salary allowances
Interest allowances
Balance allocated equally
Total net income
Total
Less partners' withdrawals
Ending capital balances

Trevor

Student Name:
Class:
Problem 12-03A
BBB PARTNERSHIP
General Journal

Date
Dec. 31

Account Titles
Income Summary
Will Beck, Capital
Trevor Beck, Capital
Barb Beck, Capital
31 Will Beck, Capital
Trevor Beck, Capital
Barb Beck, Capital
Will Beck, Withdrawals
Trevor Beck, Withdrawals
Barb Beck, Withdrawals

Debit

Credit

Given Data P12-03A:

BBB PARTNERSHIP
Will contribution
Trevor contribution
Barb contribution
Expected annual net income
Plans to share net incomes and losses:
Plan A: Share equally
Plan B: In ratio of initial contributions
Plan C:
Salary to Will
Salary to Trevor
Salary to Barb
Interest allowance on initial contributions
Balance shared equally

$142,500
118,750
213,750
210,000

$ 38,000
28,000
43,000
10%

Part 1 data:
Net income for year

$210,000

Part 2 data:
Income earned
Will's withdrawals
Trevor's withdrawals
Barb's withdrawals

$ 87,500
18,000
25,000
34,000

Part 3 data:
Income earned

$ 87,500

Check figure:
Part 2, Barb, Ending Capital

$221,125