# Use the table to show how to distribute net income of \$120,000 for the calendar year under each of…

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29.99

Use the table to show how to distribute net income of \$120,000 for the calendar year under each of… 1 answer below » Staci Cook, Lin Xi, and Kevin Schwartz formed the CXS Partnership by making capital contributions of \$72,000, \$108,000, and \$60,000, respectively. They predict annual partnership net income of \$120,000 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of \$20,000 to Cook, \$15,000 to Xi, and \$40,000 to Schwartz; interest allowances of 12% on their initial capital investments; and the balance shared equally. Required 1. Prepare a table with the following column headings. View complete question » Staci Cook, Lin Xi, and Kevin Schwartz formed the CXS Partnership by making capital contributions of \$72,000, \$108,000, and \$60,000, respectively. They predict annual partnership net income of \$120,000 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of \$20,000 to Cook, \$15,000 to Xi, and \$40,000 to Schwartz; interest allowances of 12% on their initial capital investments; and the balance shared equally. Required 1. Prepare a table with the following column headings. Income (Loss) Sharing Plan Calculations Cook Xi Schwartz Total Use the table to show how to distribute net income of \$120,000 for the calendar year under each of the alternative plans being considered. (Round answers to the nearest whole dollar.) 2. Prepare a statement of partners’ equity showing the allocation of income to the partners assuming they agree to use plan (c), that income earned is \$43,800, and that Cook, Xi, and Schwartz withdraw \$9,000, \$19,000, and \$12,000, respectively, at year-end. 3. Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan (c) and that net income is \$43,800. Also close the withdrawals accounts. View less » Jul 24 2014 07:49 AM