P13-4 Allocating profits and losses to the partners, preparing partnership financial statements [25-35 min] On 1 July 2015, Edwards, French and Gill formed the E, F and G partnership. Edwards invested...

Extracted text: P13-4 Allocating profits and losses to the partners, preparing partnership financial statements [25-35 min] On 1 July 2015, Edwards, French and Gill formed the E, F and G partnership. Edwards invested $21 000, French $35000 and Gill $44000. Edwards will manage the store, French will work in the store three-quarters of the time, and Gill won't work in the business. Requirements 1 Calculate the partners' shares of profits and losses under each of the following plans: a Loss for the year ended 30 June 2016 is $42000 and the partnership agreement allocates 45% of profits to Edwards, 35% to French and 20% to Gill. The agreement doesn't discuss the sharing of losses. b Profit for the year ended 30 June 2016 is $97000. The first $25000 is allocated on the basis of relative partner capital balances. The next $48000 is based on service, with $38000 going to Edwards and $10000 going to French. Any remainder is shared equally. 2 Revenues for the year ended 30 June 2016 were $209000 and expenses were $112000. Using plan b above, prepare the partnership income statement for the year (and showing each partner's share of the profit or loss for the year).