Chapter 12, Problem E12.18E

To determine

Withdrawal of cash from partnership: Every partner withdraws some cash from the partnership for his personal living expenses. These withdrawals are called “Drawings”. The partnership agreement contains the clause about the withdrawal of cash by the partners. Sometimes, partners need to pay interest on the cash withdrawn from the partnership if the partnership agreement contains the clause about the same.

To Determine:

1. Journal Entry to close the net income to the partners.

2. Journal Entry to close the partner’s drawing account.

3. Calculation of balance in partner’s capital accounts after closing above entries.