The profit and loss sharing agreement for the Tuttle, Upman, and Veer partnership provides for residual profits and losses to be allocated 2:3:6 to Tuttle, Upman, and Veer, respectively. In 2014, the partnership recorded $11,000 of net income that was properly allocated to the partners' capital accounts. On January 18, 2015, after the books were closed for 2014, Tuttle discovered that the $16,500 payment for the partnership's liability and workers compensation insurance for 2015 was recorded as insurance expense when it was paid on December 28, 2014. Required: Prepare the necessary correcting entry(s) for the partnership.
The profit and loss sharing agreement for the Tuttle, Upman, and Veer partnership provides for residual profits and losses to be allocated 2:3:6 to Tuttle, Upman, and Veer, respectively. In 2014, the partnership recorded $11,000 of net income that was properly allocated to the partners' capital accounts. On January 18, 2015, after the books were closed for 2014, Tuttle discovered that the $16,500 payment for the partnership's liability and workers compensation insurance for 2015 was recorded as insurance expense when it was paid on December 28, 2014. Required: Prepare the necessary correcting entry(s) for the partnership.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare the necessary correcting entry(s) for the partnership.
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