Financial Accounting Exercise 12 - 4

Chapter 12 HW

Exercise 12-4	Requied.1
	Share to Dallas		Share to Weiss		Total
Net income					$    420,000
Salary allowances		$    150,000		$      75,000	- 225,000
Balance of net income					$    195,000
Interest allowances:
Investment	$    160,000		$    200,000
Times interest rate	20%		20%
Interest allowances		32,000		40,000	- 72,000
Balance of net income					$    123,000
Allocation of balance of net income:
Balance of net income	$    123,000		$    123,000
Times share	60.00%		40.00%
Allocation of balance of net income		73,800		49,200	- 123,000
Balance of net income					$            -0-
Allocation to each partner		$    255,800		$    164,200
Exercise 12-4	Requied.2
	Share to Dallas		Share to Weiss		Total
Net income					$     (95,000)
Salary allowances		$    150,000		$      75,000	- 225,000
Balance of net income					$   (320,000)
Interest allowances:
Investment	$    160,000		$    200,000
Times interest rate	20%		20%
Interest allowances		32,000		40,000	- 72,000
Balance of net income					$   (392,000)
Allocation of balance of net income:
Balance of net income/(Loss)	$   (392,000)		$   (392,000)
Times share	60.00%		40.00%
Allocation of balance of net income		- 235,200		- 156,800	+ 392,000
Balance of net income					$            -0-
Allocation to each partner		$     (53,200)		$     (41,800)