Question

Kara Ries, Tammy Bax, and Joe Thomas invested $26,000, $42,000, and $50,000, respectively, in a partnership. During its first calendar year, the firm earned $359,700. Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $359,700 net income to the partners under each of the following separate assumptions:

Answer 1

1. First Assumption that Partneers has no Aggrement on the method of Sharing Income //Loss
				Date	Account Tittle	Debit	Credi
Dec-31	Income Summary	3,59,700.00
	Kara Rise		1,19,900.00
	Tommy Bax		1,19,900.00
	Joes Thomas		1,19,900.00

2. Second Assumption that Partneers agrees to share income /loss in ther beginning capital investment made
					Percentage of Total Equity (a)	Income Sumamry (b)	Share in income (aXb)
Kara Ries	26000/118000	359700	79,255.93
Tommy Bax	42000/118000	359700	1,28,028.81
Joes Thomas	50000/118000	359700	1,52,415.25

Date	Account Tittle	Debit	Credi
Dec-31	Income Summary	359700
	Kara Rise		79,255.93
	Tommy Bax		1,28,028.81
	Joes Thomas		1,52,415.25

3. IIIrd Assumption that sharing of income/loss after adjusment made for salary and interest on capital if any
							Note : in Question figure were not provided for Interest on Capital % and Salary allowance but similar question was solved hence persumed the same figure, Salary Allowance Ries: 66000, $56000 to Bax, and $80000 to Thomas and Interest 10% on egining capial. Kindly change the same if something has provided in question.
		Kara	Thomas	Joe	Total
	Net Inccome				3,59,700
	Salary Alllowance	66,000	56,000	80,000	2,02,000
	Balance After Salary Allowance				1,57,700
	Interst Allowance	2,600	4,200	5,000	11,800
	Baalnce after Interest and Salaries				1,45,900
	Balance allocated equally	48,633	48,633	48,633
	balance of Income
	Share of Partner	1,17,233	1,08,833	1,33,633

Date	Account Tittle	Debit	Credi
Dec-31	Income Summary	2,49,000.00
	Kara Rise		1,17,233.00
	Tommy Bax		1,08,833.00
	Joes Thomas		1,33,633.00