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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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Chapter
Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

a. What accounts are debited and credited to record a partner's cash withdraw in lieu of salary?

b. The articles of partnership provide for a salary allowance of $6,000 per month to partner C. If C withdrew only $4,000 per month, would this affect the division of the partnership net income? Explain.

c. At the end of the fiscal year, what accounts are debited and credited to record the division of net income among partners?

a.

To determine

Partnership

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

To indicate: The accounts to be debited and credited in withdrawal of cash by partner lieu of salary.

Explanation

The partner’s drawin...

b.

To determine

To explain: If the withdrawal of C will affect the division of the net income of the partnership.

c.

To determine

To indicate: The accounts to be debited and credited to record the division of net income among the partners.

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