PROBLEM 1 Carson & Smith, Inc. reports net income of $45,...

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PROBLEM 1
Carson & Smith, Inc. reports net income of $45,000. The partnership agreement provides for annual salaries of $23,000 for Carson and $19,000 for Smith and interest allowances of $5,000 to Carson and $3,000 to Smith. Any remaining income or loss is to be shared 60% by Carson and 40% by Smith.
Instructions:
a) Determine the amount of net income allocated to each partner.
b) Prepare the closing entries for the division of net income. Note: Write clearly and use proper labels [do not abbreviate]. You must show all the steps using appropriate levels and calculations as needed to allocate salary and interest allowance to partners. Do not simply show calculated amounts.

PROBLEM 2
The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Bart Corporation at December 31, 2017.
Common Stock ($5 stated value) $950,000 Paid-in Capital in Excess of Stated Value—Common Stock 800,000
Paid-in Capital in Excess of Par—Preferred Stock 280,000
Preferred Stock (8%, $100 par, noncumulative) 500,000
Retained Earnings 1,000,000
Treasury Stock—Common (10,000 shares) 120,000
Instructions: Prepare the stockholders’ equity section of the balance sheet at December 31, 2017 assuming that the number of authorized common stock shares is 80,000 and the number of authorized preferred shares is 70,000.
Note: Write clearly and use proper labels [do not abbreviate]. To earn full credit, you must write down the appropriate levels for each shown amount.

PROBLEM 3
At December 31, Zhuzer Company has cash $50,000, noncash assets $236,000, liabilities $138,000, and the following capital balances: Zhu $108,000 and Zerkel $40,000. The firm decides to liquidate, and $256,000 in cash is received for the sale noncash assets. Zhu and Zerkel income ratios are 70% and 30%, respectively.
Instructions:
Prepare a cash payments schedule. Note: Write clearly and use complete account names [Do not abbreviate].
Prepare journal entries to record:
(a) The sale of noncash assets.
(b) The allocation of the gain or loss on liquidation to the partners.
(c) Payment of creditors.
(d) Distribution of cash to the partners.
Note: Write clearly and use complete account names [Do not abbreviate].

PROBLEM 4
Blass Corporation was organized on January 1, 2017. It is authorized to issue 5,000 shares of 8%, $40 par value preferred stock, and 90,000 shares of no-par common stock with a stated value of $3 per share. Journalize the following stock transactions that were completed during the first year. Note: Write clearly and use full account names [Do not abbreviate].
Jan. 10 Issued 10,000 shares of common stock for cash at $5 per share. Mar. 1 Issued 1,000 shares of preferred stock for cash at $55 per share.
Apr. 1 Issued 10,000 shares of common stock for land. The asking price of the land was $60,000. The company’s
estimate of fair value for the land was $53,000.
May 1 Purchased 2,000 shares of its $3 stated value common stock at cash price of $15 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill for $50,000 for services provided in helping the company organize.
Sep. 1 Sold 900 shares of the treasury stock for cash at $17 per share.

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