PA1.

LO 15.3The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is:

1. $40,000 2.$25,000
3. ($5,000) In addition, show the resulting entries to each partner’s capital account. Tatum’s capital account balance is$50,000 and Brook’s is $60,000. PA2. LO 15.4Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammy’s admission are$50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is:

1. $20,000 2.$80,000
3. \$50,000.

In addition, show the resulting journal entries to each of the three partners’ capital accounts.

PA3.

LO 15.5When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?