Question

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Required information Problem 12-3A Allocating partnership income LO P2 [The following information applies to the questions displayed below Kara Ries, Tammy Bax, and Joe Thomas invested $44,000, $60,000, and $68,000, respectively, in a partnership. During its first calendar year, the firm earned $412,500. Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $412,500 net income to the partners under each of the following separate assumptions: Problem 12-3A Part 1 Required: (1) The partners have no agreement on the method of sharing income and loss. View transaction list < Prev 1 2 of 4 Next

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Answer 1

Problem 12.30 Part 1 Date Credit Dec 31 131,500 General Journal Debit Income Summary $ 419,500 Kara's capital Tammy's capital Joe's capital (profits distributed equally among partners] 131,500 137,500 Part 2 Supposting | Percentage of 14 computations / Total Equity kara Ries 25.5814). 1 x Tammy Bax 34.88376%. Joe Thomas Income Summary 4 12,500 Allocated Income to Capital 105,523 143,895 X X 414,500 X 39.95 35). 419,500 163,082

(in 8) Thomas | 412,500 Total 46,000 119,000 293,500 Part 3 supposting Calculation Ries I Bax Net Income Salary Allowance 139,000 34,000 Balance after Salay Interest allowance 4,400 6,000 Balance aftel Salaly 4 Interest Balance allocated equally 92,100 92,100 Balance of Income Share of Partners 135,500 132,100 6,800 17,200 276,300 92,100 276,300 144,900 412,500
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