2. To write off as uncollectible $1,500 of the accounts receivable, and to make a reserve of 2% of the remainder of the accounts receivable to provide for possible losses thereon.
3. To provide for the preferred stock dividend for the year.
4. To provide for a bonus of $7,500 to the employees.
5. To provide for a dividend on the common stock of 15% for the year.
6. To carry the balance then remaining on the Profit and Loss account to an Undivided Profits account.
Draft entries to comply with the above provisions.
5. A has $5,000 invested in a business. He sells B a half-interest for $3,000 and keeps the money. Make the entry.
6. Jones and Johnson form a copartnership, January 1, 19—, each investing $10,000. April 1, Jones pays in an additional $2,500, and Johnson draws out $1,500. August 1, Johnson pays in $3,000, and Jones withdraws $1,000. The profits for the year ending December 31, 19— are $5,000.
Prepare statements showing each partner’s investment and portion of profits, the profits being divided in proportion to capital invested and the time it is employed.
7. A, B, and C agree to start in business with a capital of $200,000, of which A is to furnish $100,000, and B and C $50,000 each. A is to have one half-interest in the business, and B and C each one-quarter. Interest at 5% is to be credited on excess, or charged on deficiency of capital. A contributes $100,000; B $45,000; and C $40,000.