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DJ and AM Co. reports net loss of $35,000. The partnership agreement provides for annual salaries of $15,000 for DJ and $20,000 for AM and

DJ and AM Co. reports net loss of $35,000. The partnership agreement provides for annual salaries of $15,000 for DJ and $20,000 for AM and interest allowances of $2,500 to DJ and $3,500 to AM. Any remaining income or loss is to be shared 7:3 for DJ and AM respectively.

Instructions

a. Compute the amount of net income/loss distributed to each partner at year end.

b. Prepare the necessary closing entries at year-end.

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DJ and AM Co. reports net loss of $35,000. The partnership agreement provides for annual salaries of $15,000 for DJ and $20,000 for AM and interest allowances of $2,500 to DJ and $3,500 to AM. Any remaining income or loss is to be shared 7:3 for DJ and AM respectively.

Instructions
a. Compute the amount of net income/loss distributed to each partner at year end.
b. Prepare the necessary closing entries at year-end.