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Ries, Bax, and Thomas invested $52,000, $68,000, and $76,000,respectively, in a partnership. During its first...

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.) 


2. The partners agreed to share income and loss in the ratio of their beginning capital investments. (Do not round intermediaComplete this question by entering your answers in the tabs below. Appropriati... of profits General Journal Prepare the entr


Solutions

Expert Solution

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

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