Anderson, Moore, and Brenner have capital balances of $24,000, $36,000, and $60,000, respectively. The partners share profits and losses as follows: a. The first $50,000 is divided based on the partners' capital balances. b. The next $50,000 is based on service, shared equally by Anderson and Brenner. Moore does not receive a salary allowance. c. The remainder is divided equally. Requirements 1. Compute each partner's share of the $130,000 net income for the year. 2. Journalize the closing entry to allocate net income for the year.
Anderson, Moore, and Brenner have capital balances of $24,000, $36,000, and $60,000, respectively. The partners share profits and losses as follows: a. The first $50,000 is divided based on the partners' capital balances. b. The next $50,000 is based on service, shared equally by Anderson and Brenner. Moore does not receive a salary allowance. c. The remainder is divided equally. Requirements 1. Compute each partner's share of the $130,000 net income for the year. 2. Journalize the closing entry to allocate net income for the year.
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 3EA: The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have...
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Question
Anderson,
Moore,
and
Brenner
have capital balances of
$24,000,
$36,000,
and
$60,000,
respectively. The partners share |
a.
|
The first
$50,000
is divided based on the partners' capital balances. |
|
b.
|
The next
$50,000
is based on service, shared equally by
Anderson
and
Brenner.
Moore
does not receive a salary allowance. |
|
c.
|
The remainder is divided equally.
|
Requirements
|
1.
|
Compute each partner's share of the
$130,000
net income for the year. |
|
2.
|
Journalize the closing entry to allocate net income for the year.
|
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