Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On February 1, 2020, Tessa Williams and Audrey Xie formed a partnership in Ontario, Williams contributed $80,000 cash and Xie contributed land valued at $12000

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
On February 1, 2020, Tessa Williams and Audrey Xie formed a partnership in Ontario, Williams contributed $80,000 cash and Xie contributed land valued at $12000 and a small building valued at $180,000. Also, the partnership assumed responsibility for Xle's $130,000 long term note payable associated with the land and building. The partners agreed to share profit or loss as follows Williams is to receive an annual salary allowance of $90,000, both are to receive an annual interest allowance of 20% of their original capital investments, and any remaining profit or loss is to be shared equally On November 20, 2020, Williams withdrew cash of $60,000 and Xie withdrew $45,000 After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summary account had a credit balance of $160,000 Required: 1. Present general Journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income Summary and withdrawals accounts Record the initial capital investments. 2 Record the partners' withdrawals. 3 Record the allocation of profit and close the Income summary account. 4 Record the entry to close withdrawals accounts. 2. Determine the balances of the partners' capital accounts as of the end of 2020. Williams Xie Capital account balances On February 1, 2020, Tessa Williams and Audrey Xie formed a partnership in Ontario Williams contributed $80,000 cash and Xie contributed land valued at $120,000 and a small building valued at $180,000. Also, the partnership assumed responsibility for Xie's $130,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows. Williams is to receive an annual salary allowance of $90,000, both are to receive an annual interest allowance of 20% of their original capital investments, and any remaining profit or loss is to be shared equally On November 20, 2020. Williams withdrew cash of $60,000 and Xle withdrew $45,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summary account had a credit balance of $160,000 Required: 1. Present general Journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the income Summary and withdrawals accounts 1 Record the initial capital investments. 2 Record the partners' withdrawals. * Record the allocation of profit and close the Income summary account. 4 Record the entry to close withdrawals accounts. 2. Determine the balances of the partners' capital accounts as of the end of 2020. Williams Xie Capital account balances

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Edp Objective Questions And Explanations

Authors: Irvin N. Gleim, William A. Hillison

5th Edition

0917537521, 978-0917537523

More Books

Students also viewed these Accounting questions

Question

explain the need for human resource strategies in organisations

Answered: 1 week ago

Question

describe the stages involved in human resource planning

Answered: 1 week ago