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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 | |||||
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