At the end of its first year of operations, December 31, 2016, ABC Company's unadjusted accounts...

  

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At the end of its first year of operations, December 31, 2016, ABC Company's unadjusted accounts show the following: Drawings $23,000 14,000 10,000 Capital $50,000 30,000 20,000 Partner S. Abbott D. Bartlett R. Cross The capital balance above represents each partner's initial capital investment. No closing entries have been recorded for net income (loss) or drawings as yet. Required: a) Journalize the entry to record the division of net income for the year ended December 31, 2016 under each of the following independent assumptions: (Hint: you may find it helpful to prepare a schedule like one of those shown in the textbook) 1. Net income is shared on the ratio of their initial investments. Net income is $47,000. 2. Net income is $34,000. Bartlett and Cross are given salary allowances of $15,000 and $10,000 respectively. The remainder is shared equally. 3. Net income is $23,000. Each partner is allowed interest of 5% on beginning capital balances. Cross is given a $15,000 salary allowance. The rémainder is shared equally. b) Journalize the entry to close each partner's drawings account. c) Prepare a statement of partners' equity for the year end under assumption #3 in part (a) above. At the end of its first year of operations, December 31, 2016, ABC Company's unadjusted accounts show the following: Drawings $23,000 14,000 10,000 Capital $50,000 30,000 20,000 Partner S. Abbott D. Bartlett R. Cross The capital balance above represents each partner's initial capital investment. No closing entries have been recorded for net income (loss) or drawings as yet. Required: a) Journalize the entry to record the division of net income for the year ended December 31, 2016 under each of the following independent assumptions: (Hint: you may find it helpful to prepare a schedule like one of those shown in the textbook) 1. Net income is shared on the ratio of their initial investments. Net income is $47,000. 2. Net income is $34,000. Bartlett and Cross are given salary allowances of $15,000 and $10,000 respectively. The remainder is shared equally. 3. Net income is $23,000. Each partner is allowed interest of 5% on beginning capital balances. Cross is given a $15,000 salary allowance. The rémainder is shared equally. b) Journalize the entry to close each partner's drawings account. c) Prepare a statement of partners' equity for the year end under assumption #3 in part (a) above.

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a1 Allocation of Partnership Income SAbbott D Bartlett R Cross Total Net Income 4700000 Allocated in partner 532 2350000 1410000 940000 4700000 Balanc... View the full answer