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Problem 13-2 (12 ed)

Problem 13-2
Analysis of Sandburg’s capital account: Amounts
January 1, 2015, balance as of date of divorce
Distributions to Sandburg:
30-Jun
30-Sep
Distributions to Sandburg’s spouse:
28-Feb
31-Aug
Allocation of partnership net income
December 31, 2015, balance
Distributions to Sandburg:
30-Jun
30-Sep
Distributions to Sandburg’s spouse:
28-Feb
31-Aug
Allocation of partnership net income
December 31, 2016, balance
Calculation of total distributions due Sandburg’s spouse as of February 28, 2017
February payment traceable to 2016 Amount
50% of December 31, 2016, capital balance
Total distribution
Allocation of Partnership Profit
2015 Profits: Sandburg Williams Total
Salaries
Bonus
Interest On Capital
Subtotal
Remaining profit
Total profit
2016 Profits:
Salaries
Bonus
Interest On Capital
Subtotal
Remaining profit
Total profit
Calculation of 2015 Bonus Calculation of 2016 Bonus
Calculation of interest on capital
2015 Weighted-Average Capital, Sandburg 2015 Weighted-Average Capital, Williams
Number of Number of
Amount Months Weighted Amount Months Weighted
Invested Invested Dollars Invested Invested Dollars
0
Weighted-average Weighted-average
Interest Interest
Calculation of interest on capital
2016 Weighted-Average Capital, Sandburg 2016 Weighted-Average Capital, Williams
Number of Number of
Amount Months Weighted Amount Months Weighted
Invested Invested Dollars Invested Invested Dollars
Weighted-average Weighted-average
Interest Interest
Distributions to Sandburg’s Spouse
In 2015, the first year of divorce, there was no February distribution.
In 2016, there is a February distribution, traceable to the prior year as follows:
Base earnings traceable to 2015:
Net income
Excluded salaries
Excluded bonus
Total
Percent traceable to spouse
Subtotal
Interest on previous August distribution deficiency:
Prior payment
Amount due to spouse
In 2017, there is a February distribution, traceable to the prior year as follows:
Base earnings traceable to 2016:
Net income
Excluded salaries
Excluded bonus
Total
Percent traceable to spouse
Subtotal
Interest on previous August distribution deficiency:
Prior payment —
Amount due to spouse

Problem 13-3 (12 ed)

Problem 13-3
Analysis of First Alternative
Cash flow components: March 31,
2016 2017 2018 Total
Distribution of prior years
income…………….………..
Distribution of capital investment………....
Return on proceeds …….
Total…………………………………………
Present value index………………………
Net present value………………………….
Allocation of $550,000 of Partnership Income
Other Cumulative
Raymond Partners Total
Profit and loss percentage…………………..………
Salary……………………………………...………….
Bonus (see below)………………………...………..
Balance……………………………….………………
Total…………………………………….…………….
Bonus
Return on Proceeds
Interest Amount
Year Rate Invested Return
2016
2017
Analysis of Second Alternative
Cash flow components: March 31
2016 2017 2018 Total
Distribution of prior years
income …………….………..
Distribution of capital investment………....
Return on proceeds ……….
Total…………………………………………
Present value index………………………
Net present value………………………….
Year 2016—Allocation of $605,000 of Partnership Income
Other Cumulative
Raymond Partners Total
Profit and loss percentage…………………..………
Salary……………………………………...………….
Bonus (see below)………………………...………..
Balance……………………………….………………
Total…………………………………….…………….
Year 2017—Allocation of $682,000 of Partnership Income
Other Cumulative
Raymond Partners Total
Profit and loss percentage…………………..………
Salary……………………………………...………….
Bonus (see below)………………………...………..
Balance……………………………….………………
Total…………………………………….…………….
Bonus
Bonus
Return on Proceeds
Interest Amount
Year Rate Invested Return
2016
2017