A partnership formed between two partners on January 01,2023 Partner X's inifial net investment is $30,000, ( made up of $7,000 in cash, Equipment with a fair value of $33,000, and a $10,000 note payable reflecting a bank loan for business due in six month Y's initial investment is cash of $10 000 These amounts are the values agreed upon by both partners Both partners agree that X's services are worth an annual salary of $40,000 Since Y is less experienced in the business, his services are valued at $25,000 annually It is also agreed that each partners entitled to Interest allowances equal to 10 of each partners beginning of year capital balance and any remaining balance of profit and loss will be shared 3 1 basis between X Y Required Prepare statement of Capital account of each partner in statement format, showing detail of all allowances and Closing journal entry at year end if profit is $70,000 Prepare statement of Capital account of each partner in statement format, showing detail of all allowances and Closing journal entry at year end if profit is $50,000 Prepare statement of Capital account of each partner in statement format, showing detail of all allowances and Closing journal entry at year end if profit is $10,000 The entry to close the income summary account is income summary X's Capital Account rs Capital Account The entry to close the income summary account is Income summary X's Capital Account Y's Capital Account To transfer profit of $ from income Summary to the partner's capital accounts based on the allocation specified in the partnership agreement (FILL IN THE BLANK)

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Posted on Aug 26, 2024

A partnership formed between two partners on January 01,2023. Partner X's inifial net investment is $30,000, ( made up of $7,000 in cash, Equipment with

A partnership formed between two partners on January 01,2023. Partner X's inifial net investment is $30,000, ( made up of $7,000 in cash, Equipment with a fair value of $33,000, and a $10,000 note payable reflecting a bank loan for business due in six month. Y's initial investment is cash of $10.000. These amounts are the values agreed upon by both partners. Both partners agree that X's services are worth an annual salary of $40,000. Since Y is less experienced in the business, his services are valued at $25,000 annually. It is also agreed that each partners entitled to Interest allowances equal to 10% of each partners beginning of year capital balance and any remaining balance of profit and loss will be shared 3:1 basis between X & Y.

Required:

Prepare statement of Capital account of each partner in statement format, showing detail of all allowances and Closing journal entry at year end if profit is $70,000.
Prepare statement of Capital account of each partner in statement format, showing detail of all allowances and Closing journal entry at year end if profit is $50,000.
Prepare statement of Capital account of each partner in statement format, showing detail of all allowances and Closing journal entry at year end if profit is $10,000.

The entry to close the income summary account is: income summary X's Capital Account rs Capital Account The entry to close the income summary account is : Income summary X's Capital Account Y's Capital Account To transfer profit of $ from income Summary to the partner's capital accounts based on the allocation specified in the partnership agreement. (FILL IN THE BLANK)