Question

Ries, Bax, and Thomas invested $52,000, $68,000, and $76,000, respectively, in a partnership. During its first calendar year, the firm earned $355,800.

Required:
Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $355,800 net income under each of the following separate assumptions:

2. The partners agreed to share income and loss in the ratio of their beginning capital investments. (Do not round intermediate calculations. Round final answers to the nearest whole dollar.) 

Answer 1

Answer

* [1]

	% of Total equity	Income Summary	Allocated Income to Capital
Ries	27%	$355,800	$94,396
Bax	35%	$355,800	$123,441
Thomas	39%	$355,800	$137,963

--Working

	% of Total equity
Ries	=52000/(52000+68000+76000)
Bax	=68000/(52000+68000+76000)
Thomas	=76000/(52000+68000+76000)

[2]

Date	General Journal	Debit	Credit
31-Dec	Income Summary	$355,800
	Ries, Capital		$94,396
	Bax, Capital		$123,441
	Thomas, Capital		$137,963