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2. Determine the balances of the partners' capital accounts as of the end of 2020. Regal Merle Capital account balances

2. Determine the balances of the partners' capital accounts as of the end of 2020. Regal Merle Capital account balances

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On April 1, 2020, Harry Regal and Meghan Merle formed a partnership in Alberta, renting reusable moving boxes. Contribution Regal $97,000 cash Merle $137,000 land $50,000 building Profit sharing $107,000 salary allowance 15% of original capital investments $77,000 15% of original capital investments $62,000 Cash withdrawal during year Net Income during the year was $177,000 and was in the Income Summary account. The partners agreed to share profit by allowing salary allowance, interest on their initial investments, and sharing the balance equally. Required: 1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income Summary and withdrawals accounts.
Transcribed Image Text:On April 1, 2020, Harry Regal and Meghan Merle formed a partnership in Alberta, renting reusable moving boxes. Contribution Regal $97,000 cash Merle $137,000 land $50,000 building Profit sharing $107,000 salary allowance 15% of original capital investments $77,000 15% of original capital investments $62,000 Cash withdrawal during year Net Income during the year was $177,000 and was in the Income Summary account. The partners agreed to share profit by allowing salary allowance, interest on their initial investments, and sharing the balance equally. Required: 1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income Summary and withdrawals accounts.
2. Determine the balances of the partners' capital accounts as of the end of 2020. Regal Merle Capital account balances
Transcribed Image Text:2. Determine the balances of the partners' capital accounts as of the end of 2020. Regal Merle Capital account balances
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