Concept explainers
a.
Division of
Income and loss of partnership firm are divided among partners as per the partnership agreement. In case of no specification regarding division of income or loss in partnership agreement, income or loss are equally distributed. The common method of dividing partnership income is based on:
- Service of the partners
- Services and Investments of the partners
To prepare: The
b.
To prepare: The journal entry to record closing entry of income summary account at the end of the year.
c.
To prepare: The journal entry to record closing entry of drawing account at the end of the year
d.
To explain: Why partner drawings be considered “reclaimable” until profits have been allocated?
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Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
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