kins, Willis, and Trent invested $220,000, $385,000, and $495,000, respectively, in a partnership. During its first yeal the firm recorded profit of $615,000. Required: Prepare entries to close the firm's Income Summary account as of December 31 and to allocate the profit to the partners under each of the following assumptions: a. The partners did not produce any special agreement on the method of distributing profits.
kins, Willis, and Trent invested $220,000, $385,000, and $495,000, respectively, in a partnership. During its first yeal the firm recorded profit of $615,000. Required: Prepare entries to close the firm's Income Summary account as of December 31 and to allocate the profit to the partners under each of the following assumptions: a. The partners did not produce any special agreement on the method of distributing profits.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Jenkins, Willis, and Trent invested $220,000, $385,000, and $495,000, respectively, in a partnership . During its first yeal
the firm recorded profit of $615,000.
Required:
Prepare entries to close the firm's Income Summary account as of December 31 and to allocate the profit to the partners
under each of the following assumptions:
a. The partners did not produce any special agreement on the method of distributing profits.
c. The partners agreed to share profit by providing annual salary allowances of $115,000 to Jenkins, $125,000 to Willis, and
$60,000 to Trent; allowing 15% interest on the partners' beginning investments; and sharing the remainder equally.
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