Ries, Bax, and Thomas invested $28,000, $44,000, and $52,000, respectively, in a partnership. During its first calendar year, the firm earned $326,100. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $326,100 net income under each of the following separate assumptions. 3. The partners agreed to share income and loss by providing annual salary allowances of $31,000 to Ries, $26,000 to Bax, and $38,000 to Thomas; granting 10% interest on the partners' beginning capital investments; and sharing the remainder equally.
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 following information applies to the questions displayed below.]
Ries, Bax, and Thomas invested $28,000, $44,000, and $52,000, respectively, in a partnership. During its first calendar
year, the firm earned $326,100.
Required:
Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the
$326,100 net income under each of the following separate assumptions.
3. The partners agreed to share income and loss by providing annual salary allowances of $31,000 to Ries, $26,000 to Bax, and
$38,000 to Thomas; granting 10% interest on the partners' beginning capital investments; and sharing the remainder equally.
Complete this question by entering your answers in the tabs below.
Appropriation
of profits
General
Journal
Allocate $326,100 net income by providing annual salary allowances of $31,000 to Ries, $26,000 to Bax, and $38,000 to
Thomas; granting 10% interest on the partners' beginning capital investments; and sharing the remainder equally.
Supporting Calculations
Net income
Salary allowances
Balance after salary allowances
Interest allowances
Balance after interest and salaries
Balance allocated equally
Balance of income
Shares of the partners
Ries
Bax
Appropriation of profits
Thomas
Total
General Journal >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc5f2ec32-bb00-431c-981a-9196588026c3%2Fe0419e1e-3a87-49a1-a5b9-a6fb5a4b403a%2Fhsw7241_processed.png&w=3840&q=75)
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