Question 1 • Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss of $5,000. The entries to close the income summary account after allocating the loss to the partners include a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7.500 None of these choices are correct.
Question 1 • Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss of $5,000. The entries to close the income summary account after allocating the loss to the partners include a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500 a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500 • a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7.500 None of these choices are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Question 1
• Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the
partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary
allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss
of $5,000. The entries to close the income summary account after allocating the loss to the partners
include
• a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500
a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500
•
a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500
• a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500
None of these choices are correct](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7cd338bb-3738-4289-b54a-3b7b8416cf99%2Faf25996b-645a-4de1-a66a-49e34df28de7%2F8op4op4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 1
• Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the
partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary
allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss
of $5,000. The entries to close the income summary account after allocating the loss to the partners
include
• a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500
a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500
•
a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500
• a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500
None of these choices are correct
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