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Question 1 • Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss of $5,000. The entries to close the income summary account after allocating the loss to the partners include a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7.500 None of these choices are correct.

Question 1 • Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss of $5,000. The entries to close the income summary account after allocating the loss to the partners include a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7.500 None of these choices are correct.

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter19: Accounting For Partnerships
Section: Chapter Questions
Problem 1CP
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Question 1 • Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss of $5,000. The entries to close the income summary account after allocating the loss to the partners include • a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 None of these choices are correct
Transcribed Image Text:Question 1 • Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss of $5,000. The entries to close the income summary account after allocating the loss to the partners include • a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 None of these choices are correct
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