23.07.2022 - 12:58

# The income statement for the Apple-Jack Partnership for the year ended December 31, 20X5, follows: \ APPLE-JACK PARTNERSHIP Income Statement For the Year Ended December 31, 20X5 |Net Sales| $310,000 |Cost of Goods Sold| (192,000 |Gross Margin|$ 118,000

Question:

The income statement for the Apple-Jack Partnership for the year ended December 31, 20X5, follows:

APPLE-JACK PARTNERSHIP

Income Statement

For the Year Ended December 31, 20X5

 Net Sales $310,000 Cost of Goods Sold (192,000 Gross Margin$ 118,000 Operating Expenses (33,000) Net Income $85,000 Additional Information for 20X5 1. Apple began the year with a capital balance of$43,500.

2. Jack began the year with a capital balance of $119,000. 3. On April 1, Apple invested an additional$24,300 into the partnership.

4. On August 1, Jack inversed an additional $25,000 into the partnership. 5. Throughout 20X5, each partner withdrew$400 per week in anticipation of partnership net income. The partners agreed that these withdrawals are not to be included in the computation of average capital balances for purposes of income distributions.

Apple and Jack have agreed to distribute partnership net income according to the following plan:

 Apple Jack 1. Interest on average capital balances 6% 6% 2. Bonus on net income before the bonus but after interest on average capital balances 10% 3. Salaries $16,00$ 17,00 4. Residual (if positive) 70% 30% 5. Residual (if negative) 50% 50%

Prepare a schedule that discloses the distribution of partnership net income for 20X5.

The distribution of partnership net income for 20X5 is as follows: 1. Calculation of average capital balances: - Apple: Beginning capital of $43,500 + additional investment of$24,300 = $67,800 - Jack: Beginning capital of$119,000 + additional investment of $25,000 =$144,000 - Total capital = $211,800 - Average capital balance =$105,900 2. Interest on average capital balances: - Apple: 6% x $67,800 =$4,068 - Jack: 6% x $144,000 =$8,640 3. Bonus on net income before bonus but after interest: - Net income before bonus but after interest = $85,000 - ($4,068 + $8,640) =$72,292 - Apple: 10% x $72,292 =$7,229.20 - Jack: 0% (no bonus specified) 4. Salaries: - Apple: $16,000 - Jack:$17,000 5. Residual distribution: - If positive: Apple 70%, Jack 30% - If negative: Apple 50%, Jack 50% - Since the net income is positive, the residual amount is distributed according to the specified ratio: - Apple: 70% x ($85,000 -$4,068 - $7,229.20 -$16,000) = $41,386.76 - Jack: 30% x ($85,000 - $4,068 -$7,229.20 - $16,000) =$17,712.24 Therefore, the distribution of partnership net income for 20X5 is as follows: - Apple: - Interest on average capital balances: $4,068 - Bonus on net income before bonus but after interest:$7,229.20 - Salaries: $16,000 - Residual distribution:$41,386.76 - Total distribution: $68,684.96 - Jack: - Interest on average capital balances:$8,640 - Salaries: $17,000 - Residual distribution:$17,712.24 - Total distribution: $43,352.24 Explanation: The distribution of partnership net income is based on the agreed upon plan which includes calculating interest on average capital balances, a bonus on net income before the bonus but after interest, salaries, and residual distribution. The calculation of each distribution is based on the specified ratio and formula given in the plan. Do you know the answer? Not sure about the answer? Find the right answer to the question The income statement for the Apple-Jack Partnership for the year ended December 31, 20X5, follows: \ APPLE-JACK PARTNERSHIP Income Statement For the Year Ended December 31, 20X5 |Net Sales|$ 310,000 |Cost of Goods Sold| (192,000 |Gross Margin| \$ 118,000 by subject Law, and if there is no answer or no one has given the right answer, then use the search and try to find the answer among similar questions.