Prepare a schedule showing the division of net income

Reference no: EM133610280

Question: Lewis Wardell and Lewis Lomas own Lewis' Antiques. Their partnership agreement provides for annual salary allowances of $79,000 for Wardell and $69,000 for Lomas, and interest of 10 percent on each partner's invested capital at the beginning of the year. The remainder of the net income or loss is to be distributed 60 percent to Wardell and 40 percent to Lomas. The partners withdraw their salary allowances monthly. On January 1, 20X1, the capital account balances were Wardell, $290,000, and Lomas, $250,000. On December 15, 20X1, Lomas made a permanent withdrawal of $89,000. The net income for 20X1 was $210,000. Required: Prepare the general journal entry on December 15, 20X1, to record the permanent withdrawal by Lomas. Prepare the general journal entries on December 31, 20X1, to: Record the salary allowances for the year. Record the interest allowances for the year. Record the division of the balance of net income. Close the drawing accounts into the capital accounts, assuming that Wardell and Lomas have withdrawn their full salary allowances. Prepare a schedule showing the division of net income to the partners as it would appear on the income statement for 20X1. Prepare a statement of partners' equities showing the changes

Reference no: EM133610280

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