Holt, Inari, and Jax are partners in the HIJ Partnership. On December 31, Year 5, the accounts are as follows: Partner Drawings Capital J. Holt $10,100 $30,000 K. Inari R. Jax 7,000 5,000 40,000 50,000 The capital amount represents the beginning capital balance. The partnership earned $40,000 in Year 5. The partnership agreement states that profits are shared, including an allocation of 5% of the capital account beginning balance and salary allowances of $15,000 for Holt, $20,000 for Inari, and $18,000 for Jax. Any remaining profit or loss is shared in the ratio 5:3:2.
Holt, Inari, and Jax are partners in the HIJ Partnership. On December 31, Year 5, the accounts are as follows: Partner Drawings Capital J. Holt $10,100 $30,000 K. Inari R. Jax 7,000 5,000 40,000 50,000 The capital amount represents the beginning capital balance. The partnership earned $40,000 in Year 5. The partnership agreement states that profits are shared, including an allocation of 5% of the capital account beginning balance and salary allowances of $15,000 for Holt, $20,000 for Inari, and $18,000 for Jax. Any remaining profit or loss is shared in the ratio 5:3:2.
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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Question
![Holt, Inari, and Jax are partners in the HIJ Partnership. On December 31, Year 5, the
accounts are as follows:
Partner
Drawings
Capital
J. Holt
$10,100
$30,000
K. Inari
7,000
40,000
R. Jax
5,000
50,000
The capital amount represents the beginning capital balance. The partnership earned
$40,000 in Year 5. The partnership agreement states that profits are shared, including
an allocation of 5% of the capital account beginning balance and salary allowances of
$15,000 for Holt, $20,000 for Inari, and $18,000 for Jax. Any remaining profit or loss is
shared in the ratio 5:3:2.
Required
Calculate the division of profit for HIJ Partnership
b. Journalize the entry to record the division of profit.
c. Prepare a statement of partner's equity for Year 5.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc424496d-308b-4cdd-8730-6a6ef0a53c24%2F3828a78c-5b9f-49d3-b8b9-abb28cc20306%2Ft999bxp_processed.png&w=3840&q=75)
Transcribed Image Text:Holt, Inari, and Jax are partners in the HIJ Partnership. On December 31, Year 5, the
accounts are as follows:
Partner
Drawings
Capital
J. Holt
$10,100
$30,000
K. Inari
7,000
40,000
R. Jax
5,000
50,000
The capital amount represents the beginning capital balance. The partnership earned
$40,000 in Year 5. The partnership agreement states that profits are shared, including
an allocation of 5% of the capital account beginning balance and salary allowances of
$15,000 for Holt, $20,000 for Inari, and $18,000 for Jax. Any remaining profit or loss is
shared in the ratio 5:3:2.
Required
Calculate the division of profit for HIJ Partnership
b. Journalize the entry to record the division of profit.
c. Prepare a statement of partner's equity for Year 5.
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