hare profits and losses as follows: Salary allowances of $7,000 to Graeme, $8,000 to Bella and $14,000 to Anne. Interest allowances of 10% on beginning-of-year capital balances Balance to be divided equally. If profit for the year is $220,000, calculate each partner's share and prepare the appropriate journal entry to close the Income Summary to the capital accounts.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Graeme, Bella and Anne are partners with capital balances of $90,000, $70,000, and $50,000, respectively. The partners agreed to share
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