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HANDOUT
PARTNERSHIPS
P12-2A
At the end of its first year of operations on December 31, 2012, LAD Company’s accounts
show the following.
Partner Drawings Capital
The capital balance represents each partner’s initial capital investment. Therefore, net
income or net loss for 2012 has not been closed to the partners’ capital accounts.
Instructions
(a) Journalize the entry to record the division of net income for the year 2012 under
each of the following independent assumptions.
(b) Prepare a schedule showing the division of net income under assumption (3)
above.
(c) Prepare a partners’ capital statement for the year under assumption (3) above.
1
E12-8
The Freema Company at December 31 has
Cash $20,000, Noncash assets $100,000,
Liabilities $55,000, and the following
Capital balances: Dalek $45,000 and Briggs $20,000.
The firm is liquidated, and $110,000 in cash is received for the noncash assets.
Dalek and Briggs income ratios are 60% and 40%, respectively.
Instructions
(1) Prepare a schedule of cash payments.
(2) Prepare a schedule of cash payments, if the cash received for noncash assets is
$80,000.
E12-9
Instructions