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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