1.
Introduction: Under the
To prepare: The distribution of net income statement.
2.
Introduction: Under the partnership, the income earned by the business is allocated among the partners in sharing ratio. It can be based on salary, can be allocated equally, or as per terms decided during the establishment of the partnership.
To prepare: The statement of partner’s equity.
3.
Introduction: Under the partnership, the income earned by the business is allocated among the partners in sharing ratio. It can be based on salary, can be allocated equally, or as per terms decided during the establishment of the partnership.
To prepare: The journal entries for closing income summary.
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FUND.ACCT.PRIN.
- The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.arrow_forwardThe partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.arrow_forwardThe partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.arrow_forward
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