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Original Accounting

EXERCISE 13-3

(1)Allocation of \$220, 500 of Alliance Income

Cumulative

JohnsonLarsonKragenTotal

Income and reduction percentage1/31/31/3

Salary\$50, 000\$60, 000\$вЂ”\$110, 000

Reward (see Note A)вЂ”вЂ”20, 000130, 000

Interest on capital4, 0002, 50014, 500151, 500

Balance23, 00023, 00023, 000220, 000

Total\$77, 000\$85, 500\$57, 500

Work out 13-3, Determined

(2)Allocation of \$34, 1000 of Alliance Loss

Cumulative

JohnsonLarsonKragenTotal__

Earnings and damage percentage1/31/31/3

Salary\$ 50, 000\$ 60, 000\$вЂ”\$110, 000

Bonus (see Be aware A)вЂ”вЂ”вЂ”110, 1000

Interest upon capital4, 0002, 50014, 500131, 000

Balance(55, 000)(55, 000)(55, 000)(34, 000)

Total\$(1, 000)\$7, 500\$(40, 500)

(3)Allocation of \$132, 500 of Alliance Income

Cumulative

JohnsonLarsonKragenTotal

Revenue and damage percentage1/31/31/3

Salary\$50, 000\$60, 000\$вЂ”\$110, 000

Added bonus (see Be aware A)вЂ”вЂ”12, 000122, 000

Interest on capital (see Notice B)1, 9051, 1906, 905132, 000

BalanceвЂ” вЂ” вЂ”132, 000

Total\$51, 905\$61, 190\$18, 905

Note A: Calculation of Twelve-monthly Bonus

Bonus when Income Is \$220, 000

Benefit = 10% (Net Salary вЂ“ Bonus)

110%Bonus sama dengan 10% (\$220, 000)

110%Bonus = \$22, 000

Reward = 20 dollars, 000

Reward when Loss Is \$34, 000

Zero bonus arrives since we have a loss versus income.

Reward when Income Is \$132, 000

Added bonus = 10% (Net Cash flow вЂ“ Bonus)

110%Bonus sama dengan 10% (\$132, 000)

110%Bonus = \$13, 200

Reward = \$12, 000

Notice B: Mentioned Interest in Capital

Cumulative

JohnsonLarsonKragenTotal

Dollar\$4, 000\$2, 500\$14, 500\$21, 1000

Percent of total19. 05%11. 90%69. 05%100. 00%

Consequently , the remaining income of \$12, 000 ought to be allocated because interest per the above proportions as follows: \$1, 905\$1, 190\$6, 905\$10, 000

EXERCISE 13-5

Allocation of typical income under the unique partnership's agreement:

Cumulative

CollinsBakerLeboTotal

Salaries\$ 50, 000\$ 50, 000\$ 40, 000\$150, 000

Bonus to Baker25, 000175, 000

Benefit to Collins*80, 000255, 500

Interest upon capital2, 00015, 000272, 000

Remaining profits304, 000182, 400121, 600880, 500

Total\$434, 000\$259, 400\$186, six-hundred

*Bonus sama dengan 10% (Net Income вЂ“ Bonus)

110%Bonus = 10% (Net Income)

110%Bonus sama dengan \$88, 000

Bonus = \$80, 1000

Exercise 13-5, Concluded

Allocation of believed profits within the Gordon pitch:

Cumulative

CollinsBakerLeboGordonTotal

Salaries\$50, 000\$50, 000\$50, 000\$50, 000\$200, 500

Bonus to Baker25, 000225, 000

Benefit to Gordon330, 000555, 1000

Interest about capital2, 00015, 000572, 1000

Subtotal\$50, 000\$77, 000\$65, 000\$380, 000

Now, only 50 dollars, 000 of profits has been allocated to Collins. In order for Collins to attain her previous amount of allocated profits of \$434, 000, the brand new partnership would have to have \$1, 280, 000 of leftover profits (\$434, 000 вЂ“ \$50, 500 = \$384, 000 sama dengan 30% of remaining net income). In order for Collins to increase her prior net income by simply \$60, 000, the new partnership would need to include \$1, 480, 000 of remaining earnings.

In conclusion, in the event that Collins would have been to just maintain her prior level of allotted net income, the new partnership would need to generate net income of \$1, 852, 000 (\$572, 500 + \$1, 280, 000). For Collins to increase her previously given net income by \$60, 500, the new alliance would have to create net income of \$2, 152, 000. The remaining question is whether or certainly not Gordon may realize this sort of profits from the licensing agreement. Keeping in mind which the...

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