Reference no: EM132725713

Pharoah Company reported net income of $89,300. The partnership agreement provides for salaries of $24,700 to Miley and $18,400 to Guthrie. They divide the remainder 37% to Miley and 63% to Guthrie.

                                              Miley             Guthrie

Division of net income       $ 41794            $ 47506

Problem 1: Prepare the closing entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation        Debit               Credit

Income Summary                            68,000
Coburn Capital                                                     35200
Webb Capital                                                           32800

Problem 1: Assume the partnership income-sharing agreement calls for income to be divided with a salary of $41,000 to Coburn and $36,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)