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Ehrlich (beginning capital, $110,000) and Haar (beginning capital $85,000) are partners. During 2022 the partnership earned net income of $60,000. Ehrlich made drawings of $25,000 while Haar made drawings of $10,000.   Instructions Assume the partnership income-sharing agreement calls for income to be divided with a salary of $22,000 to Ehrlich and $25,000 to Haar, interest of 10% on beginning capital, and the remainder divided 70%-30%. Prepare a schedule of the income allocation to each partner.  Prepare the journal entry to record the allocation of net income.  Compute Ehrlich's ending capital balance

Ehrlich (beginning capital, $110,000) and Haar (beginning capital $85,000) are partners. During 2022 the partnership earned net income of $60,000. Ehrlich made drawings of $25,000 while Haar made drawings of $10,000.   Instructions Assume the partnership income-sharing agreement calls for income to be divided with a salary of $22,000 to Ehrlich and $25,000 to Haar, interest of 10% on beginning capital, and the remainder divided 70%-30%. Prepare a schedule of the income allocation to each partner.  Prepare the journal entry to record the allocation of net income.  Compute Ehrlich's ending capital balance

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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Ehrlich (beginning capital, $110,000) and Haar (beginning capital $85,000) are partners. During 2022 the partnership earned net income of $60,000.

Ehrlich made drawings of $25,000 while Haar made drawings of $10,000.

 

Instructions

Assume the partnership income-sharing agreement calls for income to be divided with a salary of $22,000 to Ehrlich and $25,000 to Haar, interest of 10% on beginning capital, and the remainder divided 70%-30%.

  1. Prepare a schedule of the income allocation to each partner.
  2.  Prepare the journal entry to record the allocation of net income.
  3.  Compute Ehrlich's ending capital balance
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