Surj Uppal and Parvinder Atwal began a new business on February 14, when each invested $154,500 in

Question:

Surj Uppal and Parvinder Atwal began a new business on February 14, when each invested $154,500 in the company. On December 20, it was decided that $60,800 of the company’s cash would be distributed equally between the owners. Two cheques for $30,400 were prepared and given to the owners on December 23. On December 31, the company reported a $121,600 profit.

Prepare two sets of journal entries to record the investments by the owners, the distribution of cash to the owners, the closing of the Income Summary account, and the withdrawals or dividends under these alternative assumptions:

a. The business is a partnership, and

b. The business is a corporation that issued 1,000 common shares.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...

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