Need help with this accounting question PROBLEM1 (10 points) Canon & Stem have c

Question

Need help with this accounting question

PROBLEM1 (10 points) Canon & Stem have capital balances on Januay 1 of $50,000 and $80,000 nespecively The parnenship agreement provos avuu salaus ol $22 000 tr Carson "d $17,000 sem"terest alowance of 15% on tal balances, and nie norme or loss stobeshaod 70% by Carson and 3% by Saen. Instructions: a) Prepare a schedule showing the distibution of net income for the partners assuming the partnensthip had net income of $55,000 b) Prepare the closing entries for the division of net income Note: Weite clearly and use proper labels Ido not abbreviatel To garn fut credit you mst show al the sregs using appropriate levels and caculations as needed to allocate salary and interest allowrance to partners. Do not simply show calculated amounts DIVISION OF NET INCOME NI- Carson Sten Ial Ioal General Journal J1 Date Account Titles and Explanation Ref.Debit Credit

Explanation / Answer

Answer a. Division of Net Income Carson Stern Total Net Income    55,000.00 Salary to Partners    22,000.00    17,000.00    39,000.00 Interest to Partners      7,500.00    12,000.00    19,500.00 Balance    (3,500.00) Divided between Partners (70% : 30%)    (2,450.00)    (1,050.00)    (3,500.00) Total    27,050.00    27,950.00                   -   Answer b. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1 Income Summary    55,000.00    Carson, Capital    27,050.00    Stern, Capital    27,950.00 (To record the income distributed between partners)

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---