Daisey Brodsky and Jim Leigh began a partnership on February 1, 2017, by investing $62,000 and $88,000, respectively. They agree to share profit and losses by allocating yearly salary allowances of $60,000 to Daisey and $40,000 to Jim, an interest allowance of 8% on their investments, and to split the remainder 55:45. During the year, Daisey withdrew $30,000 and Jim withdrew $22,000. The partnership recorded a loss of $15,000 in its first fiscal year.
Instructions
(a) Prepare a schedule showing the division of the loss for the year.
(b) Prepare the journal entry to close the Income Summary account at the end of the year.