On November 1, 2014, Harris, Davis, and Tallis formed a partnership by contributing $56,000 in cash, $91,000 of equipment, and a truck worth $42,000, respectively. The partners agreed to share profits and losses as follows: Davis and Tallis were to receive an annual salary allowance of $196,000 each and any remaining profit or loss was to be shared 5:2:3. On October 31, 2015, the partnership’s first year-end, the Income Summary account had a debit balance of $35,000. On November 1, 2015, Harris withdrew from the partnership and received $7,000 from the partnership.
1. Prepare journal entries for the following dates:
a. November 1, 2014
b. October 31, 2015
c. November 1, 2015
2. Calculate the balance in each partner’s capital account immediately after the November 1, 2015, entry.