Required information

Problem $12-4$A $($Algo$)$ Partnership income allocation, statement of partners' equity, and closing entries LO P$2$

$[$The following information applies to the questions displayed below.$]$

Mo$,$ Lu$,$ and Barb formed the MLB Partnership by making investments of $$75,600,$$$294,000,$ and $$470,400,$ respectively. They predict annual partnership net income of $$498,000$ and are considering the following alternative plans of sharing income and loss: $($a$)$ equally; $($b$)$ in the ratio of their initial capital investments; or $($c$)$ salary allowances of $$83,600$ to $Mo,$$$62,700$ to $Lu,$ and $$94,500$ to Barb; interest allowances of $10\%$ on their initial capital investments; and the remaining balance shared as follows: $20\%$ to $Mo,40\%$ to $Lu,$ and $40\%$ to Barb.

Problem $12-4$A $($Algo$)$ Part $3$

$3.$ Prepare the December $31$ journal entry to close Income Summary assuming they agree to use plan $($c$)$ and that net income is $$498,000.$ Mo$,$ Lu$,$ and Barb withdraw $$39,300,$$$53,300,$ and $$69,300,$ respectively, at year$-$end. Also close the withdrawals accounts.

Prev

$17$

of $17$

Next