Problem 12-3A Allocating partnership income LO P2

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Larry Howard, Orrville Hardy, and Lou Costello invested $28,000, $44,000, and $52,000, respectively, in a partnership. During its first calendar year, the firm earned $388,200. Prepare the entry to close the firms Income Summary account as of its December 31 year-end and to allocate the $388,200 net income to the partners under each of the following separate assumptions:

Journal entry worksheet

• Record the entry to close the income summary account assuming the partners have agreed to share income and loss by providing annual salary allowances of $38,000 to Ries, $33,000 to Bax, and $45,000 to Thomas; granting 10% interest on the partners beginning capital investments; and sharing the remainder equally.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec 31