Question

Exercise 12-05 a-d Coburn (beginning capital, $58,000) and Webb (beginning capital $84,000) are partners. During 2020, the partnership earned net income of $71,000, and Coburn made drawings of $18,000 while Webb made drawings of $20,000. Assume the partnership income-sharing agreement calls for income to be divided 35% to Coburn and 65% to Webb. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Income Summary 71000 Coburn, Capital 24850 Webb, Capital 46150 Assume the partnership income-sharing agreement calls for income to be divided with a salary of $35,000 to Coburn and $23,000 to Webb, with the remainder divided 35% to Coburn and 65% to Webb. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Income Summary 71000 Coburn, Capital 20300 Webb, Capital 37700 Assume the partnership income-sharing agreement calls for income to be divided with a salary of $38,000 to Coburn and $33,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Income Summary 71000 Coburn, Capital 35500 Webb, Capital Compute the partners' ending capital balances under the assumption in part (c) above.

Answer 1

S.No.	General,Journal	Debit	Credit
a)	Income Summary	$   71,000.00
	To Coburn's Capital		$24,850.00
	To Webb's Capital		$46,150.00
	(Net Income distributed among partners' in the ratio of 35% and 65%)
b)	Net Income -Salary of Coburn Salary of Webb=($71000-$35000-$23000)	$   13,000.00
	Income Summary	$   71,000.00
	To Coburn's Capital($35000+($13000*35%))		$39,550.00
	To Webb's Capital=($23000+($13000*65%))		$31,450.00
	(Net Income distributed among partners' in the ratio of 35% and 65% after adjusting salary from net income)
c )	Salary+Interest of Coburn's+Salary + Interest of Webb-Net Income
	$38000+($58000*10%)+$33000+($84000*10%)-$71000	$   14,200.00
	Income Summary	$   71,000.00
	To Coburn's Capital($38000+$5800-($14200*50%)		$36,700.00
	To Webb's Capital=($33000+8400-$14200*50%)		$34,300.00
	(Net income distributed after adjusted salary and interest)
d)	Ending Balance=Beginning Capital+Net Income-Drawings	$ 1,75,000.00
	Coburn's Balance=($58000+$36700-$18000)		$76,700.00
	Webb's Balance=($84000+$34300-$20000)		$98,300.00
	(Ending Balance of capital of Partner's)