Problem 11-1A Methods of allocating partnership profit LO 03

Check figures: c. Cr. Jenkins, Capital: $95,000

Jenkins, willis, and Trent invested $100,000, $175,000, and $225,000, respectively, in a partnership. During its first year, the firm recorded profit of $300,000

Required:Prepare entries to close the firm's income summary account as of December 31 and to allocate the profit to the partners under each of the following assumptions

a. The partners did not produce any special agreement on the method of distributing profits.

b. The partners agreed to share profit and losses in the ratio of their beginning investments.

c. The partners agreed to share profit by providing annual salary allowances of $55,000 to Jenkins, $60,000 to Willis, and $25,000 to Trent; allowing 20% interest on the partners' beginning investments; and sharing remainder equally.