Question: Mary and Nancy invested 80 000 each to form a partnership

Mary and Nancy invested $80,000 each to form a partnership. Mary has been authorized a salary of $20,000, while Nancy’s salary is $25,000. Each partner is to receive 10% on the original capital investment. The profit and loss agreement stipulates that any remaining income or loss is to be divided equally. The partnership had a net loss of $20,000 this year.

Prepare the journal entry to record the allocation of the net loss for the year. Show supporting computations.

Sale on SolutionInn
  • CreatedMarch 16, 2015
  • Files Included
Post your question