The capital balances of Hobbs and Shaw at January $1,2022$ are P$96,000$ and P$224,000$ respectively in Goggles Company.

On March $1,2022,$ Hobbs invested an additional P$30,000.$ During the year, Hobbs and Shaw withdrew P$72,000$ and P$60,000$

respectively. The company earned a net income of $\mathrm{????}180,000.$ There was no stipulation in the partnership agreement

as to the profit and loss sharing but it was provided that beginning capital balances will earn $10\%$ interest.

Calculate the distribution of net income showing necessary computations.

Give the journal entries to close the income summary and the drawing accounts.

Compute the ending capital balances as of December $31,2022.$

Answer rating: 100% (QA)

1 Distribution of Net Income a Calculate the total capital at the beginning of the year for each partner including interest earned at 10 Hobbs beginni... View the full answer