In: Accounting
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]
% 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 |