Daisey Brodsky and Jim Leigh began a partnership on February 1, 2021, by investing $62,000 and $88,000,
Question:
Daisey Brodsky and Jim Leigh began a partnership on February 1, 2021, by investing $62,000 and $88,000, respectively. They agree to share profit and losses by allocating yearly salary allowances of $60,000 to Daisey and $40,000 to Jim, an interest allowance of 8% on their investments, and to split the remainder 55:45. During the year, Daisey withdrew $30,000 and Jim withdrew $22,000. The partnership recorded a loss of $15,000 in its first fiscal year.
Instructions
a. Prepare a schedule showing the division of the loss for the year.
b. Prepare the journal entry to close the Income Summary account at the end of the year.
PartnershipA 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 Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak