7. A and B's partnership agreement states the following: A and B are to maintain average capital balances of P200,000 and P300,000, respectively. A 12% interest is to be computed on any excess or deficiency. Balance is shared equally. The partnership earned profit of P120,000 for the nine months ended Dec. 31, 20x1. The average capital balances of the partners during the period were P240,000 for A and P220,000 for B. Requirement: Provide the entry to close the income summary account to the partners' capital accounts.
7. A and B's partnership agreement states the following: A and B are to maintain average capital balances of P200,000 and P300,000, respectively. A 12% interest is to be computed on any excess or deficiency. Balance is shared equally. The partnership earned profit of P120,000 for the nine months ended Dec. 31, 20x1. The average capital balances of the partners during the period were P240,000 for A and P220,000 for B. Requirement: Provide the entry to close the income summary account to the partners' capital accounts.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
complete solution
![ce
7. A and B's partnership agreement states the following:
00
on
A and B are to maintain average capital balances of
P200,000 and P300,000, respectively. A 12% interest is to be
computed on any excess or deficiency.
Balance is shared equally.
in
The partnership earned profit of P120,000 for the nine months
ended Dec. 31, 20x1. The average capital balances of the partners
during the period were P240,000 for A and P220,000 for B.
Requirement: Provide the entry to close the income summary
account to the partners' capital accounts.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feb230afd-d4a1-4e3e-aed3-2ccc68ae1a08%2F1822548b-7ca9-431e-af8b-4630231caebb%2Fntrx1hj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ce
7. A and B's partnership agreement states the following:
00
on
A and B are to maintain average capital balances of
P200,000 and P300,000, respectively. A 12% interest is to be
computed on any excess or deficiency.
Balance is shared equally.
in
The partnership earned profit of P120,000 for the nine months
ended Dec. 31, 20x1. The average capital balances of the partners
during the period were P240,000 for A and P220,000 for B.
Requirement: Provide the entry to close the income summary
account to the partners' capital accounts.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education