
Concept explainers
(a)
(1)
Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these
Accounting rules for journal entries:
- To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.
To prepare: Journal entries to record the division of net income.
(2)
To prepare: Journal entries to record the division of net income.
(3)
To prepare: Journal entries to record the division of net income.
(b)
To prepare: A schedule showing the division of net income under assumption (3) above.
(c)
To prepare: A partners’ capital statement for the year under the assumption (3) above.

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Chapter 12 Solutions
ACCOUNTING PRINCIPLES V.1 W/ WILEY PLU
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