x, and Thomas invested $56,000, $72,000, and $80,000, respectively, in a partnership. During its first calendar year
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.
The following information applies to the questions displayed below.]
Ries, Bax, and Thomas invested $56,000, $72,000, and $80,000, respectively, in a partnership. During its first calendar year, the firm earned $431,100.
Required:
Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $431,100 net income under each of the following separate assumptions.
2. The partners agreed to share income and loss in the ratio of their beginning capital investments.
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