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Problem - Allocating Partnership Income

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Problem - Allocating Partnership Income

Kara Ries, Tammy Bax, and Joe Thomas invested $52,000, $68,000, and $76,000, respectively, in a partnership. During its first calendar year, the firm earned $400,800.

Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $400,800 net income to the partners under each of the following separate assumptions:

The partners agreed to share income and loss by providing annual salary allowances of $37,000 to Ries, $32,000 to Bax, and $44,000 to Thomas; granting 10% interest on the partners' beginning capital investments; and sharing the remainder equally.

Reference no: EM132440706

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