The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a $10,000 salary and Brook receives a $15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: If an amount is zero, enter "0". For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300) A. $50,000 Tatum Brook Total Salaries Remaining income allocation Total division of income B. $25,000 Tatum Brook Total Salaries Remaining income allocation Total division of income C. $(5,000) Tatum Brook Total Salaries $4 Remaining income allocation Total division of income $4 Prepare the journal entries to show the resulting each partner's capital account. Tatum's capital account balance is $60,000 and Brook's is $70,000. If an amount box does not require an entry, leave it blank.
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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