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Provide the entry to close the income summary account

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Reference no: EM132929663

A and B's partnership agreement states the following:

  • A and B are to maintain average capital balances of P200,000 and P300,000, respectively. A 12% interest is to be computed on any excess or deficiency.
  • Balance is shared equally.

The partnership earned profit of P120,000 for the nine months ended Dec. 31, 20x1. The average capital balances of the partners during the period were P240,000 for A and P220,000 for B.

Requirement:

Problem 1: Provide the entry to close the income summary account to the partners' capital accounts.

Reference no: EM132929663

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