Question

K. Ison (beginning capital, $42,000) and I. McCoy (beginning capital $67,200) are partners. During 2021, the partnership reported profit of $50,400, and Ison made drawings of $12,600 while McCoy made drawings of $16,800.

Assume the partnership agreement calls for profit to be divided 55% to Ison and 45% to McCoy. Prepare the journal entry to close the Income Summary account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit     I. McCoy, Capital    Income Summary    K. Ison, Capital         K. Ison, Capital    Income Summary    I. McCoy, Capital         I. McCoy, Capital    K. Ison, Capital    Income Summary     (To close Income Summary.)

Assume the partnership agreement calls for profit to be divided with a salary of $25,200 to K. Ison and $16,800 to I. McCoy, with the remainder divided 55% to Ison and 45% to McCoy. Prepare the journal entry to close the Income Summary account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit     I. McCoy, Capital    K. Ison, Capital    Income Summary         I. McCoy, Capital    K. Ison, Capital    Income Summary         Income Summary    K. Ison, Capital    I. McCoy, Capital     (To close Income Summary.)

Assume the partnership agreement calls for profit to be divided with a salary of $33,600 to K. Ison and $25,200 to I. McCoy, interest of 10% on beginning capital, and the remainder divided 50%–50%. Prepare the journal entry to close the Income Summary account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit     K. Ison, Capital    I. McCoy, Capital    Income Summary         K. Ison, Capital    I. McCoy, Capital    Income Summary         I. McCoy, Capital    Income Summary    K. Ison, Capital     (To close Income Summary.)

Answer 1

1)

Date	Account title	Debit	credit
	Income summary	50400
	K. Ison, Capital      (50400*55%)		27720
	I. McCoy, Capital (50400*45%)		22680

2)

	K. Ison, Capital	I. McCoy, Capital	Total
Salary	25200	16800	42000
Remaining profit of 50400-42000= 8400 in 55% and 45%	8400*55%= 4620	3780	8400
Total	29820	20580	50400

Date	Account title	Debit	credit
	Income summary	50400
	K. Ison, Capital		29820
	I. McCoy, Capital		20580

3)

	K. Ison, Capital	I. McCoy, Capital	Total
Salary	33600	25200	58800
Interest on beginning capital	42000*10%=4200	67200*10%=6720	10920
Remaining profit/(loss) of 50400--58800-10920= -19320 in 50% and 50%	-19320*50%=-9660	-9660	-19320
Total	28140	22260	50400

Date	Account title	Debit	credit
	Income summary	50400
	K. Ison, Capital		28140
	I. McCoy, Capital		22260