(1) Armstrong plans to leave the TJ Partnership. Currently, her capital account is $48,000. Assume the partners have no agreement for sharing profits and losses. Prepare the journal entry to record the withdrawal under the following assumptions. The remaining partners, Tanner and Jackson, agree to pay Armstrong $58,000.

(2) On January 1, 2020, Jack Skilling, Kenneth Lay, and Andy Fastow formed a partnership by contributing $45,000 in cash, $65,000 of equipment, and a delivery van worth $35,000 respectively. The partners agreed to share the profits and losses as follows: Lay and Fastow were to receive an annual salary allowance of $20 000 each and the remaining profit or loss was to be shared 5 : 2 : 3. On December 31, 2020, the partnership’s first year-end, the Income Summary account had a debit balance of $30 000.  

Required:

In the table below, calculate the partnership allocation for the year ended December 31, 2020

Complete the December 31, 2020 journal entry to close the income summary account to the partners' capital accounts

Answer rating: 100% (QA)

1 Accounts Debit Credit Armstrong 48000 Tanner 58000 48000 x 12 ... View the full answer