E -1

Jack Jill
Net Income 48,000
Salary allowances 24,000 30,000 -54,000
Balance 2:1 -6,000
-6,000 x 2/3 -4,000
-6000 x 1/3 -2,000 Incomme summary 48,000
Share in Profits 20,000 28,000 Jack, cap 20,000
Jill, cap 28,000

E-2
X Y
Net Income 90,000
Interest on original investments:
X 50,000 x 10% 5,000
Y 100,000 10% 10,000 -15,000
Salary allowances 27,000 18,000 -45,000
Balance equally 15,000 15,000 30,000
Total share in Profits 47,000 43,000

E-3
X Y
Net Ioss -10,000
Interest on original investments:
X 50,000 x 10% 5,000
Y 100,000 10% 10,000 -15,000
Salary allowances 27,000 18,000 -45,000
Balance equally -35,000 -35,000 -70,000
Total share in Profits -3,000 -7,000 X, cap 3,000
Y, cap 7,000
Inc. summ 10,000
E-4
Fred Ethel Increase:
Capital beginning 42,000 58,000 Additional investment
Add share in NI (40,000 /2) 20,000 20,000 Net income
Total 62,000 78,000 Decreases: Withdrawals
Less withdrawals -12,000 -17,000
Capital at the end 50,000 61,000

E-5
A B
Net Income 90,000
Salary allowances 60,000 -60,000
Balance equally 15,000 15,000 30,000
Total share 15000 75000

Share in NI 15,000 75,000

Additional investment 10,000
less withdrawals -48,000
Increase in capital 15,000 37,000

E-6
U V W
1/1 Capital 480,000 720,000 1,080,000
7/1 Investment 120,000
10/1 Withdrawal -180,000
Ave. Capital - U
1/1 480,000 x 12/12 = 480,000
7/1 120,000 x 6/12 = 60,000
Ave. Capital - U 540,000

W
1/1 1,080,000 x 12/12= 1,080,000
10/1 -180,000 x 3/12= -45,000
Ave. 1,035,000

U V W
Net Income 420,000
Salary allowances 72,000 60,000 48,000 -180,000
8% Interest on average capital
U - 540,000 x 8% 43,200
V - 720,000 x 8% 57,600
W - 1,035,000 x 8% 82,800 -183,600
Balance equally 18,800 18,800 18,800 56,400
Share in Profits 134,000 136,400 149,600

Capital, beg. 480,000 720,000 1,080,000

Add: Share in NI 134,000 136,400 149,600
Investment 120,000
Total 734,000 856,400 1,229,600
Less: withdrawals -180,000
Drawings against she in NI -60,000 -60,000 -60,000
Capital 12/31 674,000 796,400 989,600

E-7
A B
Net loss -6,000
Salary alllowances 80,000 40,000 -120,000
10% interest on beg. capital:
A - 80,000 x 10% 8,000
B - 40,000 x 10% 4,000 -12,000
Balance -138,000
A - 138,000 x 8/12 -92,000
B - 138,000 x 4/12 -46,000
Share in losses -4,000 -2,000

Capital, beginning 80,000 40,000

Less: share in lossses -4,000 -2,000
withdrawals -4,000 -4,000
Capital, end of yr. 1 72,000 34,000

Yr.2 A B
Net Income 22,000
Salary alllowances 80,000 40,000 -120,000
10% interest on beg. capital: NIBB 22,000 /110%
A - 72,000 x 10% 7,200 NIAB 20,000 100%
B - 34,000 x 10% 3,400 -10,600 BONUS 2,000 10%
Bonus to A 2,000 -2,000
Bal. equally -55,300 -55,300 -110,600
Share in Profit 33,900 -11,900

Capital beg. Yr. 2 72,000 34,000

Add share in profit 33,900 -11,900
Less withdrawals -4,000 -4,000
Capital - Dec. 31, yr2 101,900 18,100
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