Kara Ries, Tammy Bax, and Joe Thomas invested $42,000, $58,000, and $66,000, respectively, in a partnership. During
Question:
Kara Ries, Tammy Bax, and Joe Thomas invested $42,000, $58,000, and $66,000, respectively, in a partnership. During its first calendar year, the firm earned $418,200.
Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $418,200 net income to the partners under each of the following separate assumptions:
The partners agreed to share income and loss in the ratio of their beginning capital investments. (Do not round intermediate calculations. Round final answers to the nearest whole dollar.)
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Journal entry worksheet
Record the entry to close the income summary account assuming the partners have agreed to share income and loss in the ratio of their beginning capital investments
Note: Enter debits before credits.
The partners agreed to share income and loss by providing annual salary allowances of $40,000 to Ries, $35,000 to Bax, and $47,000 to Thomas; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally.
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Journal entry worksheet
Record the entry to close the income summary account assuming the partners have agreed to share income and loss by providing annual salary allowances of $66,000 to Ries, $56,000 to Bax, and $80,000 to Thomas; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally.
Note: Enter debits before credits.
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Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso