Question

At the end of its first year of operations on December 31, 2020, Carla Vista Company's accounts show the following.

Answer 1

Answer:

Partner                                   Capital                               Drawings

Art Niensted                         $49,000                             $22,900

Greg Bolen                            13,600                                  34,000

Krista Sayler                           10,800                                 23,500

1. Net income is $28,300. Income is shared 6:3:1

$ 28,300/10= $ 2830

Art Niensted   gets (6/10 )* $ 28300=  $ 16980

Art Niensted  New Balance will be after deducting drawings = $ 16980- $ 22,900= ($ 5920)

Greg Bolen  gets (3/10 )* $ 28300 = $ 8490

Greg Bolen New Balance will be after deducting drawings =$ 8490 - $ 34000= ($ 25,510)

Krista Sayler    gets (1/10 )* $ 28300 =  $2830

Krista Sayler New Balance will be after deducting drawings =$2830- $ 23500= ($ 20670)

2. Net income is $39,600. Niensted and Bolen are given salary allowances of $15,200 and $10,300 respectively. The remainder is shared equally

Salary is deducted .

$39,600- $ 15,200- $ 10,300= $ 14,100

$ 14,100/3 = $ 4700

Each partner will get $ 4700 after getting their salary

Art Niensted   gets $ 15200 + $4700=  $ 19900

Art Niensted  New Balance will be $ 19900 - $ 22,900= ($3000)

Greg Bolen  gets $ 10,300 + $ 4700= $ 15,000

Greg Bolen New Balance will be  $ 15,000- $ 34000=  ($19000)

Krista Sayler    gets  $ 4700

Krista Sayler New Balance will be  4700 -  $ 23500= ($ 18,800)

3. Net income is $18,900. Each partner is allowed interest of 10% on beginning capital balances Niensted is given a $14,250 salary allowance. The remainder is shared equally

Calculation of Income = $18900- $14250/3 = $ 4650/3= $1550

Art Niensted     = 10 % 0f   $49,000  =  $ 4900                    

Greg Bolen     = 10 % 0f  13,600 =   $ 1360                            

Krista Sayler      = 10 % 0f   10,800  =  % 1080  

Art Niensted   gets  $ 4900  + $14250 +1550=  $ 20700

Art Niensted  New Balance will be after deducting drawings = =  $ 20700- 22900= ($2200)

Greg Bolen  gets $ 1360+1550 = $ 2910

Greg Bolen New Balance will be after deducting drawings =$ 2910- $ 34000= ( $31090)

Krista Sayler    gets  $ 1080 +$1550=  $ 2360

Krista Sayler New Balance will be after deducting drawings =$ 2360 - $ 23500= ($ 20870)