Partnership

A PARTNERSHIP is a joining of two or more individuals as co-owners of a business for profit. When funds are needed to organize the business, the partnership will enable the capital needed to be raised through the contributions of each partner to the partnership. Many professions, such as accounting, law, and medicine, use the partnership form of business organization for this reason.



Part-Exe-001

Exercise 1

March 7, 2007, Shehla, Gary, and Lynn entered into a partnership, Name their business "ShehGarLynn's"  The agreement called for Shehla to contribute the following asset: Cash, $25,000; land, 125,000; for Gari to contribute  Cash, $200,000; for Lynn to contribute Cash $50,000. Profit and Loss sharing ratio agreed upon their capital invested into business.

March 8, 2007, Both parties agreed Lynn's will manage the company with $5,000 monthly salaries plus 750 monthly allowance, and agreed to increase her salaries after a year. companies paid her advance for the month of March. check no. 1

March 8, 2007, Lynn deposit the cash in Bank of America for checking account. No. 05040711

March 9, 2007, They both agree to purchase a home care facilities amounting $750,000 on loan basis with Bank of America 5% interest for 30 years to pay...

March 10, 2007, Lynn issued a check to pay $500 Rene's cleaners for general cleaning of the home care facilities. check no. 2

March 10, 2007, Lynn issued a check to pay $750 for miscellaneous expense.check no. 3

March 10, 2007, Lynn established a petty cash fund, $ 500, check no. 4

March 11, 2007, Lynn bought office equipment; such as 5 computer at $500 each, 1 printer at $300, 1 xerox machine at $500, on credit to Best buy. no interest with in 1 year to pay.

March 12, 2007, Lynn issued check no. 5, amounting $300 to Office Depot for payment of office supplies.

March 12, 2007, Lynn hired Registered Nurse and pay $45/hr, 4 hours a day.

March 12, 2007, Lynn hired LVN  and pay $25/hr, full time, 8 hrs a day

March 13, 2007, Receive 5 patient at $5,000 each

March 14, 2007, Lynn hired 2 CNA and pay $18/hr, full time., 2 shift, day/night

March 15, 2007, Additional 5 patient at $5,000 each

March 16, 2007, Hired 2 CNA  and 2 LVN  full time.

March 17, 2007, Hired 1 office assistant $11/hr, full time 8 hrs a day.

March 18, 2007, Additional 5 patient at $5,000 each

March 19, 2007, Issued check no. 6 amounting $700 to pay for food services. for 1 week 10 patient

March 20, 2007, Issued check no. 7 amounting $300 to pay Rene's Cleaners.

Marc 30, 2007, Received statement from best buy amounting $150.


Compute the following:

1. What is the profit and loss sharing ratio accordingly?
2. Compute the salaries of all the staff.
3. Prepare the Journal entries
4. Prepare Trial Balance for the month ended.