On November 1, 2020, Harris, Davis, and Tallis formed Restore, a home renovation business, by contributing $56,000
Question:
On November 1, 2020, Harris, Davis, and Tallis formed Restore, a home renovation business, 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, 2021, the partnership’s first year-end, the Income Summary account had a debit balance of $35,000. On November 1, 2021, Harris withdrew from the partnership and received $7,000 from the partnership.
Required
1. Prepare journal entries for the following dates:
a. November 1, 2020
b. October 31, 2021
c. November 1, 2021
2. Calculate the balance in each partner’s capital account immediately after the November 1, 2021, entry.
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:
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann