FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:**Overview:**
Finnegan and Healey formed a partnership on January 1, 2024, contributing $60,000 and $19,000, respectively. The partnership reported a net income of $160,500 for the year. According to the partnership agreement, Finnegan's allocated share of the net income was $95,500, while Healey's share was $65,000. Throughout the year, both Finnegan and Healey withdrew $25,000 each in cash for personal use.
**Journal Entry Table:**
| Date | Accounts and Explanation | Debit | Credit |
|------|--------------------------|-------|--------|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
**Requirements:**
1. **Journalize the entry to close net income to the partners.**
- Record debits first, then credits. The explanation should be placed on the last line of the journal entry table.
2. **Journalize closing the partners' withdrawal accounts.**
- Explanations for these entries are not required.
3. **Calculate the balances in each partner's capital account after allocation of net income and partners’ withdrawals of cash.**
- This calculation assumes the partnership's accounting year began on January 1, 2024, and ended on December 31, 2024.
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