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In: Accounting
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.)
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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