A and B formed a partnership. The partnership agreement stipulates the following: * Annual salary allowance...

Transcribed Image Text:

A and B formed a partnership. The partnership agreement stipulates the following: * Annual salary allowance of 100,000 for A, the managing partner. * 10% bonus to A after salaries but before deduction for the bonus. * The partners share in profits and losses equally. Case 1: With profit 1. The partnership earned profit of $1,000,000 before salary allowance Requirements: a. Compute for the respective shares of the partners in the profit. b. Provide the journal entries to close the income summary account to the partners' respective equity accounts. A and B formed a partnership. The partnership agreement stipulates the following: * Annual salary allowance of 100,000 for A, the managing partner. * 10% bonus to A after salaries but before deduction for the bonus. * The partners share in profits and losses equally. Case 1: With profit 1. The partnership earned profit of $1,000,000 before salary allowance Requirements: a. Compute for the respective shares of the partners in the profit. b. Provide the journal entries to close the income summary account to the partners' respective equity accounts.

Answer rating: 100% (QA)

a Since the partners share in profits and losses equally the profit will be divided equally between ... View the full answer