Withdrawal of cash from partnership: Every partner withdraws some cash from the partnership for his personal living expenses. These withdrawals are called “Drawings”. The partnership agreement contains the clause about the withdrawal of cash by the partners. Sometimes, partners need to pay interest on the cash withdrawn from the partnership if the partnership agreement contains the clause about the same.
To Determine:
1.
2. Journal Entry to close the partner’s drawing account.
3. Calculation of balance in partner’s capital accounts after closing above entries.
Want to see the full answer?
Check out a sample textbook solutionChapter 12 Solutions
Horngren's Accounting: The Managerial Chapters, Student Value Edition Plus Mylab Accounting With Pearson Etext - Access Card Package (12th Edition)
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education