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Two separate business organizations, a partnership and a corporation, were formed on January 1, 2001.
1. The initial investments of the partners, Blue and Gray, were $25,000 and $20,000, respectively.
2. The Green Corporation has five stockholders, each owning 90 shares of $100-par common stock.
At the end of the calendar year, the net income of each company was $15,000. (a) For each organization, show the proper entry to close the Income Summary account. (b) Prepare a capital statement for the partnership and a stockholders'equity statement for the corporation, as of December 31, 2001.
Financial Statement Analysis and Preparation
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