Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Razul Amy Cash $55,600 Cash $75,800 Equipment 188,600 Furniture 88,700 Bank Loan 93,000 Accounts Payable 44,000 On March 1, Razul and Amy added a new

Razul Amy
Cash $55,600 Cash $75,800
Equipment 188,600 Furniture 88,700
Bank Loan 93,000 Accounts Payable 44,000
On March 1, Razul and Amy added a new partner to the business, Sheila. Sheila will contribute $84,000 and receive a 31% share of the business. Use the capital balances from January 1 to determine any bonuses. Assume the existing partners will split any bonus evenly.
During the year, Razul and Amy withdrew $23,800 and $19,200 respectively and the business reported a net income of $472,000. Their partnership agreement provided for sharing of net income (loss) on the following basis:
1. Salary of $68,500 is allocated to Razul, $53,000 to Amy, and $21,600 to Sheila.
2. Interest is allocated at 8% of each partner's opening capital balance.
3. Remainder is shared where Razul gets 36%, Amy gets 30%, and Sheila gets 34%.

USING THE ABOVE INFORMATION :

f) Prepare the journal entries to record the distribution of net income and the closing of the withdrawals accounts. Assume revenues and expenses have been closed to the income summary account.
Date Account Title and Explanation Debit Credit

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

Hotel And Restaurant Accounting

Authors: Cole Raymond

8th Edition

0866125531, 9780866125536

More Books

Students also viewed these Accounting questions