Liam and Katano formed a partnership to open a sushi restaurant by investing $105,000 and $115,000, respectively. They agreed to share profit based on an allocation to Liam of an annual salary allowance of $160,000, interest allowance to both Liam and Katano equal to 10% 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 $40,000. Liam withdrew $17,000 during the year and Katano $34,000. Required: 1. Determine each partners share if the first-year profit was $40,000. 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.)

Liam and Katano formed a partnership to open a sushi restaurant by investing $105,000 and $115,000, respectively. They agreed to share profit based on an allocation to Liam of an annual salary allowance of $160,000, interest allowance to both Liam and Katano equal to 10% 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 $40,000. Liam withdrew $17,000 during the year and Katano $34,000. Required: 1. Determine each partner's share if the first-year profit was $40,000. Prepare the entry to close the Income Summary on December 31, 2020. (Leave no cell blank. Enter "O" when the answer is zero. Negative answers should be indicated by a minus sign.) Share to Liam Share to Katano Total Total salaries and interest allocation $ 0 $ 0 0 Balance of profit 0 Remainder 1:3 ratio: 0 Balance of profit Shares of each partner $ 0 0 0 View transaction list Journal entry worksheet