December LISHIP Adjusted Trial Balance For the Year Ended December 31, 2005 Debit 29,000 80,000 Credit Current Assets... Fixed Assets .............. Current Liabilities. Long-term Debt.... Kelton, Capital ... Kelton, Drawing .................. Watts, Capital... Watts, Drawing ..... Sales... Cost of Goods Sold.. Operating Expenses... 7,000 50,000 20,000 4,000 18,000 7,000 100,000 52,000 23.000 195.000 195,000 The partnership agreement stipulates that a division of partnership net income or net loss is be made as follows: 1. A salary allowance of $10,000 to Kelton and $25,000 to Watts. 2. The remainder is to be divided equally. Instructions: (a) Prepare a schedule which shows the division of net income to each partner. (b) Prepare the closing entries for the division of net income Solution