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Show the share of profit to each partner

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Reference no: EM132523407

Question - Penny, Quinn and Randy formed a partnership business called 3D Graphics Company. Their investments to the partnership were $80,000, $50,000, and $30,000 respectively. In addition, they agreed to share profits as follows:

1. The first $40,000 to be allocated on the basis of their original capital investments to the partnership.

2. The next $50,000 to be allocated on the basis of their service performed, with Penny drawing $30,000 and Randy drawing $20,000.

3. The remaining is to be allocated on the ratio of 5:3:2 respectively.

Required -

a) If the business earned a profit of $65,000 during the year, show the share of profit to each partner.

b) Journalize the distribution of profit to the partner's capital account.

Reference no: EM132523407

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