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Problem 12-3A Allocating partnership income LO P2

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Kara Ries, Tammy Bax, and Joe Thomas invested $50,000, $66,000, and $74,000, respectively, in a partnership. During its first calendar year, the firm earned $346,200. Prepare the entry to close the firms Income Summary account as of its December 31 year-end and to allocate the $346,200 net income to the partners under each of the following separate assumptions:

Problem 12-3A Part 3

(3) The partners agreed to share income and loss by providing annual salary allowances of $31,000 to Ries, $26,000 to Bax, and $38,000 to Thomas; granting 10% interest on the partners beginning capital investments; and sharing the remainder equally.

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 $31,000 to Ries, $26,000 to Bax, and $38,000 to Thomas; granting 10% interest on the partners beginning capital investments; and sharing the remainder equally.