DIVIDE INCOME/LOSSES

Abe and Babe formed a partnership, with Abe investing $30,000 and Babe investing $40,000. Prepare journal entries for each following independent assumptions regarding distribution of net income (loss) in the first year.

a. Net income - $30,000. Nothing stated concerning distribution

b. Net income - $30,000. Divided 20% to 80%

c. Net loss - ($30,000). Stated ratio is 1.1

d. Net income - $30,000. Abe is to receive a salary of $12,000 and Babe is to receive $9,000. Stated ratio is 1.1

e. Net income - $30,000. Interest rate of 8% on beginning balances. Stated ratio is 3.1

f. Net income - $30,000. Abe is to receive a salary of $15,000 and Babe is to receive $10,000. Interest on beginning balances of 8%. Stated ratio is 1.1