Coburn (tbeginning caoital, $55,co) and Webb (beainning capital 8are partners. D

Question

Coburn (tbeginning caoital, $55,co) and Webb (beainning capital 8are partners. During 2017, the partnership earned net income of $63,00o, and Cobum made drawings of 14,000 while Webb made draingtof $20,000. dvided 30% to Coburn and 70% to weta prepare the Ournal entry to recr e allocation of net income. Assume the partnership come (Credit aeccount titles arp aut ing agreement calls for home indented when amoinssatered. Do not indent mansally.) and fE Income Summary 65000 Coburn, Capital v 19500 Webb, Capital income-sharing agreement calls for income to be divided with a salary of $29,000 to Coburn and $22,000 to Webb, with the remaind, divided 30% to Coburn and 70% to Webb. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatícally indented when amount k entered. Do not indent partnership Account TI Explanation Credit

Explanation / Answer

working note:

profit after salaries to be divided between coburn and webb in the ratio of (70:30).

now, the following is the journal entry.

net income 65,000 less:salary of coburn (29,000) less: salary of webb (22,000) net income after salaries 14,000 share of coburn in net income (14,000 * 30%) 4,200 total amount to be credited to coburn capital (salary + share in income) 33,200 share of webb in net income (14,000*70%) 9,800 total amount to be credited to webb capital (salary + share in income) 31,800

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