1) record the entry for formation of partnership june 1 2020 2) record the withdrawl by partner november 20 3) record the closing of profit to capital may 31

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1) record the entry for formation of partnership june 1 2020

2) record the withdrawl by partner november 20

3) record the closing of profit to capital may 31

4) record the admissin of william for 20% interest june 01

5) 

On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $294,000
cash and $388,000 of equipment, respectively. The partnership also assumed responsibility for a $54,000 note payable associated
with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $164,000, both
are to receive an annual interest allowance of 10% of their original capital investments, and any remaining profit or loss is to be shared
40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $114,000. At year-end, May 31, 2021, the
Income Summary account had a credit balance of $520,000. On June 1, 2021, Peter Williams invested $134,000 and was admitted to
the partnership for a 20% interest in equity.
Required:
1. Prepare journal entries for the following dates.
a. June 1, 2020
Transcribed Image Text:On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $294,000 cash and $388,000 of equipment, respectively. The partnership also assumed responsibility for a $54,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $164,000, both are to receive an annual interest allowance of 10% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $114,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $520,000. On June 1, 2021, Peter Williams invested $134,000 and was admitted to the partnership for a 20% interest in equity. Required: 1. Prepare journal entries for the following dates. a. June 1, 2020
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