Part 1

Plump

and

Walker

have formed a partnership. During their first year of operations, the partnership earned

$150,000.

Their-profit-and-loss-sharing agreement states that, first, each partner will receive

5%

of their capital balances. The second level is based on services, with

$15,000

to

Plump

and

$25,000

to

Walker.

The remainder then will be shared

2:3

between

Plump

and

Walker,

respectively.

Read the

requirements

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Part 1

Requirement 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming

Plump's

capital balance is

$98,000

and

Walker's

capital balance is

$98,000.

(Complete all answer boxes. For amounts that are $0, make sure to enter "0" in the appropriate column.)

		Plump	Walker	Total
	Net income (loss)
	Capital allocation:
	Plump
	Walker
	Salary allowance:
	Plump
	Walker
	Total salary and capital allocation
	Net income (loss) remaining for allocation
	Share of remainder:
	Plump
	Walker
	Total allocation
	Net income (loss) remaining for allocation
	Net income (loss) allocated to the partners

Part 2

Requirement 2. Journalize the entry to close the Income Summary account for the year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Date			Accounts and Explanation	Debit	Credit