Draft entries (in general journal form) to record the investments of Amaan and Ansa in the new partnership. b. Prepare the beginning balance sheet of the partnership (in report form) at the close of business July 1, reflecting the above transfers to the firm. c. On the following June 30 after one year of operation, the Income Summary account showed a credit balance of $74,000, and the Drawing account for each partner showed a debit balance of $31,000. Prepare journal entries to close the Income Summary account and the Drawing accounts at June 30.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
The Partnership between Amaan and Ansa established in August, 2015, when they
agreed to invest $80,000 and $150,000 consecutively and to share
The investments by Amaan consists of capital amount 20,000 dollars, inventory of $10,000
and equipment of $35,000. Ansa also agreed to contribute $50,000 cash, $20,000 value of
inventory, $60,000 fair value of machinery and remaining $20,000 in Accounts Payable. (10)
a. Draft entries (in general journal form) to record the investments of Amaan and Ansa in
the new partnership.
b. Prepare the beginning balance sheet of the partnership (in report form) at the close of
business July 1, reflecting the above transfers to the firm.
c. On the following June 30 after one year of operation, the Income Summary account
showed a credit balance of $74,000, and the Drawing account for each partner showed
a debit balance of $31,000. Prepare
account and the Drawing accounts at June 30.
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