On August 1, 2010, Jarius Walker and Rae King form a partnership. Walker agrees to invest $18,200
Question:
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The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $22,500 (Walker) and $30,400 (King), and the remainder equally.
Instructions
1. Journalize the entries to record the investments of Walker and King in the partnership accounts.
2. Prepare a balance sheet as of August 1, 2010, the date of formation of the partnership of Walker and King.
3. After adjustments and the closing of revenue and expense accounts at July 31, 2011, the end of the first full year of operations, the income summary account has a credit balance of $80,000, and the drawing accounts have debit balances of $22,500 (Walker) and $30,400 (King). Journalize the entries to close the income summary account and the drawing accounts at July 31,2011.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Step by Step Answer:
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren