In the early part of 2018, the partners of Hugh,

In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services.

Hugh and Jacobs began the partnership by contributing $130,000 and $80,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows:

Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.

A compensation allowance of $6,000 was to go to Hugh with a $23,000 amount assigned to Jacobs.

Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.

  

In 2017, revenues totaled $155,000, and expenses were $134,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $8,000 during the year, and Jacobs took out $13,000. In addition, the business paid $8,500 for repairs made to Hugh’s home and charged it to repair expense.

On January 1, 2018, the partnership sold a 20 percent interest to Thomas for $60,000 cash. This money was contributed to the business with the bonus method used for accounting purposes.

What journal entries should the partnership have recorded on December 31, 2017?

What journal entry should the partnership have recorded on January 1, 2018?

How Our Website Works

1. FILL IN OUR SIMPLE ORDER FORM

It has never been easier to place your order. Fill in the initial requirements in the small order form located on the home page and press “continue” button to proceed to the main order form or press “order” button in the header menu. Starting from there let our system intuitively guide you through all steps of ordering process.

2. PROCEED WITH THE PAYMENT

All your payments are processed securely through PayPal. This enables us to guarantee a 100% security of your funds and process payments swiftly.

3. WRITER ASSIGNMENT

Next, we match up your order details with the most qualified freelance writer in your field.

4. WRITING PROCESS

Once we have found the most suitable writer for your assignment, they start working on a masterpiece just for you!

5. DELIVERY

Once finished, your final paper will be available for download through your personal dashboard. You will also receive an email notification with a copy of your paper attached to it. Sometimes, the writer may leave a note for you about the order in case there is any additional information that they need to give you.

Leave a Reply

Your email address will not be published.