Required informationProblem 12-4A (Algo) Partnership income allocation, statement of portners' equity, and closing entries LOP2(The following information applies to the questions displayed below]Mo, Lu, and Barb formed the MLB Partnership by making investments of $70,200, $273,000, and $436,800, respectively.They predict annual partnership net income of $466,500 and are considering the following alternative plans of sharingincome and loss: (0) equally. (b) in the ratio of their initial capital investments, or (d salary allowances of $81,200 to Mo,$60,900 to Lu, and $91,500 to Barb, interest allowances of 10% on their initial capital investments, and the remainingbalance shared as follows: 20% to Mo, 40% to Lu, and 40% to BarbProblem 12-4A (Algo) Part 33. Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan (c) and that net income is$466,500. Mo, Lu, and Barb withdraw $35,700, $49,700, and $65,700, respectively, at year-end. Also close the withdrawals accounts.View transaction listJournal entry worksheetRecord the entry to close the income summary account assuming the partnersagree to use plan c and net income is $466,500.Note: Enter debits before credits. Journal entry worksheetRecord the entry to close the partners' withdrawals accounts. (Mo, Lu, andBarb withdraw $35,700, $49,700, and $65,700, respectively, at year-end.)Note: Enter debits before credits.DateGeneral JournalDebitCreditDecember 31Record entryClear entryView general journal

Required information Problem 12-4A (Algo) Partnership income allocation, statement of partners' equity, and closing entries LO P2 (The following information applies to the questions displayed below] Mo, Lu, and Barb formed the MLB Partnership by making investments of $70,200, $273,000, and $436,800, respectively They predict annual partnership net income of $466,500 and are considering the following alternative plans of sharing income and loss (a) equally. (b) in the ratio of their initial capital investments, or (d salary allowances of $81,200 to Mo, $60,900 to Lu, and $91,500 to Barb, interest allowances of 10% on their initial capital investments, and the remaining balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb roblem 12-4A (Algo) Part 3 Prepare the December 31 journal entry to close lIncome Summary assuming they agree to use plan (c) and that net income is 166,500 Mo, Lu, and Barb withdraw $35,700, $49700, and $65,700, respectively, at year-end. Also close the withdrawals accounts

Required information Problem 12-4A (Algo) Partnership income allocation, statement of partners' equity, and closing entries LO P2 (The following information applies to the questions displayed below] Mo, Lu, and Barb formed the MLB Partnership by making investments of $70,200, $273,000, and $436,800, respectively They predict annual partnership net income of $466,500 and are considering the following alternative plans of sharing income and loss (a) equally. (b) in the ratio of their initial capital investments, or (d salary allowances of $81,200 to Mo, $60,900 to Lu, and $91,500 to Barb, interest allowances of 10% on their initial capital investments, and the remaining balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb roblem 12-4A (Algo) Part 3 Prepare the December 31 journal entry to close lIncome Summary assuming they agree to use plan (c) and that net income is 166,500 Mo, Lu, and Barb withdraw $35,700, $49700, and $65,700, respectively, at year-end. Also close the withdrawals accounts

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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Partner capital accounts upon formation of partnership-Goodwill Method Assume that two individuals agree to form a partnership. Partner A is contributing an operating business that reports net assets of $30,000. Partner B is contributing cash of $45,000. The partners agree that the initial capital of the partnership should be shared equally. What will be the initial balance of the Capital Accounts of the partners assuming that the partners wish to employ the Goodwill Method? Select one: a. Partner A Partner B $90,000 $90,000 b. Partner A Partner B $37,500 $37,500 c. Partner A Partner B $45,000 $45,000 d. Partner A Partner B $30,000 $45,000
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