Reference no: EM132946475
Question - The adjusted trial balance of the Ahmad and Mohamed Partnership for the year ended December 31, 2018, appears below:
Ahmad and Mohamed PARTNERSHIP Adjusted Trial Balance For the Year Ended December 31, 2018
Debit Credit
Account's receivables 29,000
Equipment's 130,000
Notes payable 17,000
Bonds payable 50,000
Ahmed, Capital 20,000
Ahmed, Drawing 4,000
Mohamed, Capital 18,000
Mohamed, Drawing 7,000
Sales 150,000
Cost of Goods Sold 62,000
Selling Expenses 13,000
Administrative expenses 10,000
255,000 255,000
The partnership agreement stipulates that a division of partnership net income or net loss is to be made as follows:
1. A salary allowance of $45,000 to Ahmed and $25,000 to Mohamed.
2. The remainder is to be divided equally.
Required -
(a) List briefly 5 (five) advantages of Partnership formation with regards to the corporation form of firms.
(b) Prepare a schedule which shows the division of net income to each partner.
(c) Prepare all closing entries at December 31, 2018.
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