Question

The Blossom Partnership reported profit of $62,700 for the year ended February 28, 2021. Salary allowances...

The Blossom Partnership reported profit of $62,700 for the year ended February 28, 2021. Salary allowances are $54,800 for H. Mills and $26,900 for S. Stone. Interest allowances of 6% are calculated on each partner's opening capital account balance. Capital account balances at March 1, 2020, were as follows: H. Mills $72,400 (Cr.) and S. Stone $47,600 (Cr.). Any remainder is shared equally.

Calculate the division of profit to each partner.

H. Mills S. Stone

Profit allocated to partners

$enter a dollar amount $enter a dollar amount

Homework Answers

Answer #1

H. Mills

S. Stone

Profits allocated to partners

$46,044

$16,656

  • Workings

H. Mills

S. Stone

Net Income allocated

Un-allocated Net Income

Net Income

$62,700

Salary Allowance

$54,800

$26,900

$81,700

($19,000)

Interest on Capital

$4,344

$2,856

$7,200

($26,200)

Remaining net income (loss) distributed in equal ratio

($13,100)

($13,100)

($26,200)

$0

Profits allocated to partners

$46,044

$16,656

$62,700

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