Required informationProblem 12-3A (Algo) Allocating partnership income LO P2Skip to question [The following information applies to the questions displayed below.]Ries, Bax, and Thomas invested $58,000, $74,000, and $82,000, respectively, in a partnership. During its first calendar year, the firm earned $361,500.Required:Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $361,500 net income under each of the following separate assumptions. The partners agreed to share income and loss in the ratio of their beginning capital investmentsComplete this question by entering your answers in the tabs below.Appropriationof profitsAllocate $361,500 net income in the ratio of their beginning capital investments.Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar.SupportingComputationsRiesBaxGeneralJournalhomasPercentage of TotalEquityXXXXIncomeSummary< Appropriation of profitsAllocated Income toCapitalGeneral Journal >

Income allocation is the amount of net income allocated to the partners of a firm. It could be based…

Answered: Ries, Bax, and Thomas invested $58,000,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Required information

Problem 12-3A (Algo) Allocating partnership income LO P2

Skip to question

[The following information applies to the questions displayed below.]

Ries, Bax, and Thomas invested $58,000, $74,000, and $82,000, respectively, in a partnership. During its first calendar year, the firm earned $361,500.

Required:

Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $361,500 net income under each of the following separate assumptions.

The partners agreed to share income and loss in the ratio of their beginning capital investments
Complete this question by entering your answers in the tabs below.
Appropriation
of profits
Allocate $361,500 net income in the ratio of their beginning capital investments.
Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar.
Supporting
Computations
Ries
Bax
General
Journal
homas
Percentage of Total
Equity
X
X
X
X
Income
Summary
< Appropriation of profits
Allocated Income to
Capital
General Journal >

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions