
Concept explainers
a.
Division of
Income and loss of partnership firm are divided among partners as per the partnership agreement. In case of no specification regarding division of income or loss in partnership agreement, income or loss are equally distributed. The common method of dividing partnership income is based on:
- Service of the partners
- Services and Investments of the partners
To prepare: The
b.
To prepare: The journal entry to record closing entry of income summary account at the end of the year.
c.
To prepare: The journal entry to record closing entry of drawing account at the end of the year
d.
To explain: Why partner drawings be considered “reclaimable” until profits have been allocated?

Want to see the full answer?
Check out a sample textbook solution
Chapter 12 Solutions
Bundle: Accounting, Loose-Leaf Version, 26th + CengageNOWv2, 2 term Printed Access Card
- Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The business operates at a profit margin of 33⅓% on sales. Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2025. At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 - Job FBT 101 - $51,000 & Job FBT 102 - $42,980 The following events occurred during January 2025. i) ii) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000 Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job # Direct Materials Direct Labour 101 70,220 61,200 102 97,500 115,600 103 105,300 78,200 104 117,000 85,000 iv) Issued indirect materials…arrow_forwardCompute a shedule of deductible expensesarrow_forwardLennox Designs sold office machinery for $15,500. Lennox originally purchased the machinery for $60,000, and depreciation through the date of sale totaled $49,000. What was the gain or loss on the sale of the machinery?arrow_forward
- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,

