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Iggy and Swaggy

Iggy and Swaggy are business partners. The document shows their capital account balances over time and calculates their average capital balances and share of profits for the year. It provides this information for three different scenarios where the capital balances and interest earned are adjusted.

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Jerah Torrejos
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625 views3 pages

Iggy and Swaggy

Iggy and Swaggy are business partners. The document shows their capital account balances over time and calculates their average capital balances and share of profits for the year. It provides this information for three different scenarios where the capital balances and interest earned are adjusted.

Uploaded by

Jerah Torrejos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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REQUIREMENT 1

IGGY'S CAPITAL

CAPITAL ACCOUNT PORTION * OF THE YEAR AVERAGE CAPITAL


DATE
BALANCES UNCHANGED BALANCES
Jan. 1 200,000.00 5 1,000,000.00
Jun. 3 176,000.00 1 176,000.00
Jul. 3 256,000.00 6 1,536,000.00
TOTAL 2,712,000.00
Divide by: Total Number
of Months 12

TOTAL 226,000.00

Additional Solution:
IGGY'S ACCOUNT
January 1 Capital Balances 200,000.00
Permanent Withdrawals
Jun. 3 -24,000.00
Additional Investments of Capital
July-20 80,000.00
TOTAL 256,000.00

SWAGGY'S CAPITAL
CAPITAL ACCOUNT PORTION * OF THE YEAR AVERAGE CAPITAL
DATE
BALANCES UNCHANGED BALANCES
Jan.1 240,000.00 4 960,000.00
May.2 210,000.00 5 1,050,000.00
Oct.3 310,000.00 3 930,000.00
TOTAL 2,940,000.00
Divide by: Total Number
of Months 12
TOTAL 245,000

Additional Solution:
SWAGGY'S ACCOUNT
January 1 Capital Balances 240,000.00
Permanent Withdrawals
May.2 -30,000.00
Additional Investments of Capital
Oct.2 100,000.00
TOTAL 310,000.00

REQUIREMENT 2
IGGY SWAGGY TOTAL
Salary Allowances 40,000.00 60,000.00 100,000.00
Interest on Average Capital
(10%)
Iggy (224,000 x 10%) 22,400.00
Swaggy (238,000 x 10%) 23,800.00 46,200.00
Balance to be Divided
46,900.00 46,900.00 93,800.00
Equally (93,800)
Share of Partners in Profit 109,300.00 130,700.00 240,000.00

IGGY SWAGGY
Salary Allocation 40,000.00 60,000.00
Interest Distribution 22,400.00 23,800.00

REQUIREMENT 3
IGGY SWAGGY TOTAL
Salary Allowances 40,000.00 60,000.00 100,000.00
Interest on Average Capital
(10%)
Iggy (200,000 x 10%) 20,000.00
Swaggy (240,000 x 10%) 24,000.00 44,000.00
Balance to be Divided
48,000.00 48,000.00 96,000.00
Equally (93,800)
Share of Partners in Profit 109,300.00 130,700.00 240,000.00

IGGY SWAGGY
Salary Allocation 40,000.00 60,000.00
Interest Distribution 20,000.00 24,000.00

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