ACCT B8008 Lecture Notes - Lecture 8: Capital Account, General Journal, Net Income

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30 Apr 2016

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@@ partners equally share partnership net income or net loss unless the partnership contract indicates otherwise. (income ratio & loss ratio) (profit & loss ratio) . @@ the partnership recognize a partner"s share of net income or net loss in the accounts through closing entries . closing entries:- @@ partnership must make four entries in preparing closing entries :- the entries as follows@@ Debit each revenue account for its balance & credit income summary (total revenue) Debit income summary for total expenses & credit each expense account for its balance 3- to close capital account for each partners:- there are two cases:- a- net income (profit) b- net loss A- in case of net income: (cid:565)(cid:566)(cid:563)(cid:570)(cid:581) (cid:570)(cid:575)(cid:564)(cid:576)(cid:574)(cid:566) (cid:580)(cid:582)(cid:574)(cid:574)(cid:562)(cid:579)y (cid:567)(cid:576)(cid:579) (cid:570)(cid:581)(cid:580) (cid:563)(cid:562)(cid:573)(cid:562)(cid:575)(cid:564)(cid:566) & (cid:564)(cid:579)(cid:566)(cid:565)(cid:570)(cid:581) (cid:566)(cid:562)(cid:564)(cid:569) (cid:577)(cid:562)(cid:579)(cid:581)(cid:575)(cid:566)(cid:579)"(cid:580) (cid:564)(cid:562)(cid:577)(cid:570)(cid:581)(cid:562)(cid:573) (cid:562)(cid:564)(cid:564)(cid:576)(cid:582)(cid:575)(cid:581) (cid:567)(cid:576)(cid:579) (cid:569)(cid:570)(cid:580) (cid:580)(cid:569)(cid:562)(cid:579)(cid:566) (cid:576)(cid:567) (cid:575)(cid:566)(cid:581) (cid:570)(cid:575)(cid:564)(cid:576)(cid:574)(cid:566) . C(cid:579)(cid:566)(cid:565)(cid:570)(cid:581) (cid:570)(cid:575)(cid:564)(cid:576)(cid:574)(cid:566) (cid:580)(cid:582)(cid:574)(cid:574)(cid:562)(cid:579)y (cid:567)(cid:576)(cid:579) (cid:570)(cid:581)(cid:580) (cid:563)(cid:562)(cid:573)(cid:562)(cid:575)(cid:564)(cid:566) & (cid:565)(cid:566)(cid:563)(cid:570)(cid:581) (cid:566)(cid:562)(cid:564)(cid:569) (cid:577)(cid:562)(cid:579)(cid:581)(cid:575)(cid:566)(cid:579)"(cid:580) (cid:564)(cid:562)(cid:577)(cid:570)(cid:581)(cid:562)(cid:573) (cid:562)(cid:564)(cid:564)(cid:576)(cid:582)(cid:575)(cid:581) (cid:567)(cid:576)(cid:579) (cid:569)(cid:570)(cid:580) (cid:580)(cid:569)(cid:562)(cid:579)(cid:566) (cid:576)(cid:567) (cid:575)(cid:566)(cid:581) (cid:573)(cid:576)(cid:580)(cid:580) .

Related Questions

On March 1, 2017, Eckert and Kelley formed a partnership. Eckertcontributed $73,000 cash and Kelley contributed land valued at$58,400 and a building valued at $88,400. The partnership alsoassumed responsibility for Kelleyâs $63,000 long-term note payableassociated with the land and building. The partners agreed to shareincome as follows: Eckert is to receive an annual salary allowanceof $30,000, both are to receive an annual interest allowance of 9%of their beginning-year capital investment, and any remainingincome or loss is to be shared equally. On October 20, 2017, Eckertwithdrew $29,000 cash and Kelley withdrew $22,000 cash. After theadjusting and closing entries are made to the revenue and expenseaccounts at December 31, 2017, the Income Summary account had acredit balance of $100,000.

Required:
1a. & 1b. Prepare journal entries to record the partners' initial investmentsand their subsequent cash withdrawals.
1c. Determine the partners' shares of income, and then prepare journalentries to close Income Summary and the partners' Withdrawalsaccounts.
2. Determine the balances of the partnersâ capital accounts as ofDecember 31, 2017.

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ACCT B8008 Lecture Notes - Lecture 8: Capital Account, General Journal, Net Income

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