Question

Required information IThe following informarion apples to the questions displayed below) Xars Ries. ammy Bax and Joe Thomas invessed $40,00o, s56.000. and $64,000, respectively in a parnership During is first calendar year, the firm earned $398.400 Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $398,400 net income to the partners under each of the following seperate assumptians Book (3) The partners agreed to share income and loss by providing annual salary allowances of $38000 to Ries, $33.000 to Bax, and $45 000 to Thomas, granting 10% interest on the partners beginning capital investments, and sharing the remainder equally Bax ThomasTotal Ries Supporting Calculations Net income Salary allowances Balance amer salary allowances Interest allowances Balance after interest and salaries Balance allocated equally Balance cf income Shares of the partners

Answer 1

1.

Supporting calculations	Ries	Bax	Thomas	Total
Net income				398,400
Salary allowance	38,000	33,000	45,000	-116,000
Balance after salary allowance				282,400
Interest allowance	4,000	5,600	6,400	-16,000
Balance after salary and interest allowance				266,400
Balance allocated equally	88,800	88,800	88,800	-266,400
Share of the partners	130,800	127,400	140,200	0

Journal

Date	Account title	Debit	Credit
Dec. 31	Income summary	398,400
	Capital - Ries		130,800
	Capital - Bax		127,400
	Capital - Thomas		140,200

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