Kara Ries, Tammy Bax, and Joe Thomas invested $ 80,000, $ 112,000, and $ 128,000, respectively, in a partnership. During its first calendar year, the firm earned $ 249,000.

Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to al-locate the $ 249,000 net income to the partners under each of the following separate assumptions: The partners
(1) Have no agreement on the method of sharing income and loss;
(2) Agreed to share income and loss in the ratio of their beginning capital investments;
(3) Agreed to share income and loss by providing annual salary allowances of $ 66,000 to Ries, $ 56,000 to Bax, and $ 80,000 to Thomas; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally.

  • CreatedNovember 26, 2013
  • Files Included
Post your question