8.5 Partnership profit distribution - capital balances L06,8 Penny and Lane formed a partnership on 1 July 2019 with initial capital balances of $200 000 and $220 000 respectively. For the year ended 30 June 2020, the Profit or Loss Summary account disclosed a final credit balance of $180 000. Required a. Prepare the closing entry to transfer the profit disclosed in the Profit or Loss Summary account to the Profit Distribution account under method 1 and method 2. b. Prepare the closing general journal entry to distribute the profit to Penny and Lane, assuming they have agreed to share profits in the ratio of 3:2. C. Show how the partners' equity accounts will appear in the balance sheet of the partnership at 30 June 2020. 8.7 Allocation of profit LO6, 7 Thomson and Turner formed a partnership by investing $110 000 and $90 000 respectively. The partnership had a final profit of $72 000 in the first year. Required a. Prepare the journal entries to record the allocation of profit under each of the following assumptions, using method 1 procedures. i. Thomson and Turner agree to a 60:40 sharing of profits. ii. The partners agree to share profits in the ratio of their original capital investments. iii. The partners agree to recognise a $10 000 p.a. salary allowance to Thomson and an $8000 p.a. salary allowance to Turner. Each partner is entitled to 8% interest on her original investment, and any remaining profit is to be shared equally. b. Repeat requirement (a)iii. above assuming the partnership has a profit of $30 000 for the first year