The partnership of Anderson & White started the fiscal year on January 1, 2025, with capital...
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The partnership of Anderson & White started the fiscal year on January 1, 2025, with capital balances as follows: L. Anderson $37,200 and M. White $34,800. Anderson & White had a very disappointing fiscal year ended December 31, 2025. Before closing the Income Summary and Drawings accounts, the balance in the Income Summary account was a debit of $45,580. The poor results of the year are due to the recording of a loss from a lawsuit during the year. By the end of May 2025, the partners determined that available cash in the business would be small, so they stopped withdrawing funds. As of May 31, 2025, L. Anderson had withdrawn $6,360 and M. White had withdrawn $8,480, No other withdrawals were made for the remainder of the year. Once the judgement against the partnership was issued, additional cash had to be invested to make a payment on the settlement. On October 15, 2025, Anderson and White each invested $21,200 cash into the partnership. The partnership agreement of Anderson & White provides for the division of any profit or loss using the following formula: 1. 2 3. Asalary allowance of $21,200 to Anderson and $23,320 to White. An interest allowance of 5% on capital balances at the beginning of the year. The remainder to be divided between White & Anderson on a 3:2 basis. (a) Prepare a summary entry for the withdrawals taken by the partners to May 31, 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles 2025 Summary Debit Credit The partnership of Anderson & White started the fiscal year on January 1, 2025, with capital balances as follows: L. Anderson $37,200 and M. White $34,800. Anderson & White had a very disappointing fiscal year ended December 31, 2025. Before closing the Income Summary and Drawings accounts, the balance in the Income Summary account was a debit of $45,580. The poor results of the year are due to the recording of a loss from a lawsuit during the year. By the end of May 2025, the partners determined that available cash in the business would be small, so they stopped withdrawing funds. As of May 31, 2025, L. Anderson had withdrawn $6,360 and M. White had withdrawn $8,480, No other withdrawals were made for the remainder of the year. Once the judgement against the partnership was issued, additional cash had to be invested to make a payment on the settlement. On October 15, 2025, Anderson and White each invested $21,200 cash into the partnership. The partnership agreement of Anderson & White provides for the division of any profit or loss using the following formula: 1. 2 3. Asalary allowance of $21,200 to Anderson and $23,320 to White. An interest allowance of 5% on capital balances at the beginning of the year. The remainder to be divided between White & Anderson on a 3:2 basis. (a) Prepare a summary entry for the withdrawals taken by the partners to May 31, 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles 2025 Summary Debit Credit
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Related Book For
Intermediate Accounting
ISBN: 9781119790976
18th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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