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Liam and Katano formed a partnership to open a sushi restaurant by investing $95,000 and $105,000, respectively. They agreed to share profit based on an
Liam and Katano formed a partnership to open a sushi restaurant by investing $95,000 and $105,000, respectively. They agreed to share profit based on an allocation to Liam of an annual salary allowance of $150,000, interest allowance to both Liam and Katano equal to 15% of their beginning-of-year capital balance, and any balance based on a 1:3 ratio, respectively. At the end of their first year, December 31, 2020, the Income Summary had a credit balance of $30,000, Liam withdrew $7,000 during the year and Katano $24,000. Required: 1. Determine each partner's share if the first-year profit was $30,000. Prepare the entry to close the income Summary on December 31, 2020. (Leave no cell blank. Enter "0" when the answer is zero. Negative answers should be indicated by a minus sign.) Share to Llam Share to Katano Total Total salaries and interest allocation Balance of profit Remainder 1:3 ratio: Balance of profit Shares of each partner Journal entry worksheet
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