Reference no: EM132512255
The adjusted trial balance of the Ricci and Napoli Partnership for the year ended December 31, 2019, appears below:
RICCI AND NAPOLI PARTNERSHIP
Adjusted Trial Balance
December 31, 2019
Debit Credit
Current Assets......................................................................................... 19,000
Plant Assets............................................................................................. 80,000
Current Liabilities.................................................................................... 7,000
Long-term Debt....................................................................................... 40,000
Ricci, Capital........................................................................................... 20,000
Ricci, Drawings....................................................................................... 4,000
Napoli, Capital......................................................................................... 18,000
Napoli , Drawings.................................................................................... 7,000
Sales Revenue.......................................................................................... 110,000
Cost of Goods Sold................................................................................. 62,000
Operating Expenses................................................................................. 23,000
195,000 195,000
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 $12,000 to Ricci and $23,000 to Napoli.
2. The remainder is to be divided equally.
Instructions
Question (a) Prepare schedule which shows the division of net income to each partner.
Question (b) Prepare the closing entries for the division of net income and for the drawings accounts at December 31, 2019.