Reference no: EM132756453
Problem 1: C and D are partners who share profits and losses on a 3:1 basis, respectively, after a salary allowance of $15,000 is allocated to partner C. Earnings for the period total $51,000. What will be the total amount credited to the Capital account of partner C when the Income Summary account is closed?
A. $15,000
B. $20,000
C. $42,000
D. $32,000
Problem 2: In the partnership of Maxwell and Slade, Maxwell's capital balance is $40,000 and Slade's capital balance is $60,000. Maxwell sold 50% of his partnership interest to Norton, who paid $24,000 for the 50% interest. The journal entry on the partnership books related to this transaction would include:
A. a debit to Cash for $24,000
B. a debit to Cash for $20,000
C. a debit to Maxwell, Capital for $24,000
D. a debit to Maxwell, Capital for $20,000