Chapter 12 Accounting 22e Solution

Chapter 12

Ex 12-1

Cash 10,000

A/R ($123,000 – $5,000) 118,000

Merchandise inventory 74,300

Equipment 67,000

Allowance for doubtful accounts 8,100

Lamar Kline 261,200

Ex 12-3

Details Haley Manos Total

a Net income (1:1) 75,000 75,000 150,000

b Net income (3:1) 112,500 37,500 150,000

c Interest allowance 18,000 6,000 24,000

Remaining income (2:3) 50,400 75,600 126,000

Net income 68,400 81,600 150,000

d Salary allowance 45,000 60,000 105,000

Remaining income (1:1) 22,500 22,500 45,000

Net income 67,500 82,500 150,000

e Interest allowance 18,000 6,000 24,000

Salary allowance 45,000 60,000 105,000

Remaining income (1:1) 10,500 10,500 21,000

Net income 73,500 76,500 150,000

Ex 12-12

a.

(1) Kris Perry, capital (20% x 100,000) 20,000

Melvin Newman, capital (25% x 90,000) 22,500

Paul Lester, capital 42,500

(2) Cash 40,000

Steve Hurd, capital 40,000

b. Kris Perry 80,000

Melvin Newman 67,500

Paul Lester 42,500

Steve Hurd 40,000

Ex 12-22

a.

Detail Seth Kerr Driver Total

Cash invested 225 150 375

Net income 200 200 200 600

Capital balance and cash distribution 425 350 200 975

b.

Detail Seth Kerr Driver Total

Cash invested 225 150 375

Net income -40 -40 -40 -120

Capital balance and cash distribution 185 110 -40 255