
Concept explainers
(a)
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.
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.
To prepare: A schedule showing the distribution of net income.
(b)
To record: The allocation of net income.

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Chapter 12 Solutions
Accounting Principles, Volume 2: Chapters 13 - 26
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