Ries, Bax, and Thomas invested $54,000, $70,000, and $78,000, respectively, in a partnership. During its first calendar year, the firm eamed $347,100. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $347,100 net income under each of the following separate assumptions. 2. The partners agreed to share income and loss in the ratio of their beginning capital investments.
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.
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Ries, Bax, and Thomas invested $54,000, $70,000, and $78,000, respectively, in a partnership. During its first calendar
year, the firm earned $347,100.
Required:
Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the
$347,100 net income under each of the following separate assumptions.
2. The partners agreed to share income and loss in the ratio of their beginning capital investments.
Complete this question by entering your answers in the tabs below.
Appropriation
of profits
Prepare the entry to close the firm's Income Summary account as of its December 31 year-end.
Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar.
General
Journal
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Journal entry worksheet
< 1
Record the entry to close the income summary account assuming the partners
have agreed to share income and loss in the ratio of their beginning capital
investments.
Note: Enter debits before credits.
Date
December
31
Record entry
General Journal
Clear entry
Debit
Credit
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