PROBLEM 13-4A

Calculating partners shares of net profit and net loss

Rudy Trump, Monica Rivers, and Courtney Jetta have formed a partnership. Trump invested
$20,000; Rivers, $40,000; and Jetta, $60,000. Trump will manage the store, Rivers will work in
the store three-quarters of the time, and Jetta will not work in the business.
Required:
1. Calculate the partners' shares of profits and losses under each of the following plans:
a. Net profit is $87,000, and the partnership agreement does not specify how profits and
losses are shared.
b. Net loss is $47,000, and the partnership agreement allocates 45% of profits to Trump, 35%
to Rivers, and 20% to Jetta. The agreement does not discuss the sharing of losses.
c. Net profit is $104,000. The first $50,000 is allocated on the basis of salaries of $34,000 for
Trump and $16,000 for Rivers. The remainder is allocated on the basis of partner capital
contributions.
d. Net profit for the year ended 30 September, 20X4, is $86,000. The first $30,000 is
allocated on the basis of partner capital contributions, and the next $30,000 is based on
service, with $20,000 going to Trump and $10,000 going to Rivers. Any remainder is
shared equally.
2. Revenues for the year ended 30 September, 20X4, were $572,000, and expenses were
$486,000. Under plan (d), prepare the partnership statement of financial performance for the
year.
Instructions:
1. Review the printed template called Problem 13-4A that follows these instructions. Most of
the problem data have been entered for you in the data input section of the spreadsheet.
Enter the amounts where indicated.
2. There are 22 FORMULAS in the template that you need to provide to complete your
analysis. Using the spaces provided below, write the formulas where requested in the template.
FORMULA

1 _________________

FORMULA

5 _________________

FORMULA

2 _________________

FORMULA

6 _________________

FORMULA

3 _________________

FORMULA

7 _________________

FORMULA

4 _________________

FORMULA

8 _________________

PROBLEM 13-4A
Continued
FORMULA

9 _________________

FORMULA 16 _________________

FORMULA 10 _________________

FORMULA 17 _________________

FORMULA 11 _________________

FORMULA 18 _________________

FORMULA 12 _________________

FORMULA 19 _________________

FORMULA 13 _________________

FORMULA 20

FORMULA 14 _________________

FORMULA 21 _________________

FORMULA 15 _________________

FORMULA 22 _________________

_________________

3. Click the Excel icon from the program manager screen to start the spreadsheet program. Click
on Open File to retrieve the template for the problem. Enter the missing amounts in the
appropriate cells on the template. Then enter the 22 FORMULAS where indicated on the
template.
4. Click the Save File Button to save your work.
5. Click the Print Button to print your work.