Question: The partnership of Rummel and Kang Stonecutters reported revenues of

The partnership of Rummel and Kang, Stonecutters, reported revenues of $133,000 and expenses of $41,000 on the year-end work sheet. The capital balances as of January 1, 20--, were $41,000 for C. Rummel and $25,000 for V. Kang. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $43,000 for Rummel and $34,000 for Kang, the partners each withdrew their full 10% interest allowances on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 60-40 basis.

1. Prepare the lower portion of the income statement of the partnership for the year ended December 31, 20--, showing the division of the partnership net income for the year.
2. Prepare a statement of partners' equity for the year ended December 31, 20--, and the partners' equity section of the balance sheet on that date.
3. Prepare closing entries for the partnership as of December 31, 20--. (For simplicity, use the account titles "Revenues" for all revenues and "Expenses" for all expenses.)

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  • CreatedJune 07, 2014
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