Sharp and Townson had capital balances of $60,000 and $120,000, respectively, on January 1 of the current year. On May 8, Sharp invested an additional $10,000 in the partnership. During the year, Sharp and Townson withdrew $25,000 and $45,000, respectively. The revenue account at the end of the year had a balance of $600,000, and the expense account had a balance of $510,000. Sharp and Townson have agreed to split net income on a 2:1 basis. a. Prepare the statement of partnership equity for the current year. If an amount box does not require an entry, leave it blank. Sharp and Townson Statement of Partnership Equity For the Year Ended December 31 Sharp, Capital Townson, Capital Total Partnership Capital $fill in the blank 97e19bfb503bfe7_2 $fill in the blank 97e19bfb503bfe7_3 $fill in the blank 97e19bfb503bfe7_4 fill in the blank 97e19bfb503bfe7_6 fill in the blank 97e19bfb503bfe7_7 fill in the blank 97e19bfb503bfe7_8 Subtotal $fill in the blank 97e19bfb503bfe7_9 $fill in the blank 97e19bfb503bfe7_10 $fill in the blank 97e19bfb503bfe7_11 fill in the blank 97e19bfb503bfe7_13 fill in the blank 97e19bfb503bfe7_14 fill in the blank 97e19bfb503bfe7_15 Subtotal $fill in the blank 97e19bfb503bfe7_16 $fill in the blank 97e19bfb503bfe7_17 $fill in the blank 97e19bfb503bfe7_18 fill in the blank 97e19bfb503bfe7_20 fill in the blank 97e19bfb503bfe7_21 fill in the blank 97e19bfb503bfe7_22 $fill in the blank 97e19bfb503bfe7_24 $fill in the blank 97e19bfb503bfe7_25 $fill in the blank 97e19bfb503bfe7_26 b. Journalize the entries to close the revenue and expense accounts and the drawing accounts. If an amount box does not require an entry, leave it blank.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
Sharp and Townson had capital balances of $60,000 and $120,000, respectively, on January 1 of the current year. On May 8, Sharp invested an additional $10,000 in the partnership. During the year, Sharp and Townson withdrew $25,000 and $45,000, respectively. The revenue account at the end of the year had a balance of $600,000, and the expense account had a balance of $510,000. Sharp and Townson have agreed to split net income on a 2:1 basis.
a. Prepare the statement of partnership equity for the current year. If an amount box does not require an entry, leave it blank.
| Sharp and Townson | |||
| Statement of Partnership Equity | |||
| For the Year Ended December 31 | |||
| Sharp, Capital | Townson, Capital | Total Partnership Capital | |
| $fill in the blank 97e19bfb503bfe7_2 | $fill in the blank 97e19bfb503bfe7_3 | $fill in the blank 97e19bfb503bfe7_4 | |
| fill in the blank 97e19bfb503bfe7_6 | fill in the blank 97e19bfb503bfe7_7 | fill in the blank 97e19bfb503bfe7_8 | |
| Subtotal | $fill in the blank 97e19bfb503bfe7_9 | $fill in the blank 97e19bfb503bfe7_10 | $fill in the blank 97e19bfb503bfe7_11 |
| fill in the blank 97e19bfb503bfe7_13 | fill in the blank 97e19bfb503bfe7_14 | fill in the blank 97e19bfb503bfe7_15 | |
| Subtotal | $fill in the blank 97e19bfb503bfe7_16 | $fill in the blank 97e19bfb503bfe7_17 | $fill in the blank 97e19bfb503bfe7_18 |
| fill in the blank 97e19bfb503bfe7_20 | fill in the blank 97e19bfb503bfe7_21 | fill in the blank 97e19bfb503bfe7_22 | |
| $fill in the blank 97e19bfb503bfe7_24 | $fill in the blank 97e19bfb503bfe7_25 | $fill in the blank 97e19bfb503bfe7_26 |
b.
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