The partnership of Bher and Dhillips reports net income of $120000. The partners share equally in income and losses. The entry to record the partners' share of net income will include a

Question

Quizplus · Accepted Answer

Since the partners share equally in income and losses, each partner's share of the net income would be $60000 ($120000/2). Therefore, the entry to record Bher's share of net income would include a credit to Bher Capital for $60000 (to increase Bher's equity in the partnership). The entry to record Dhillips' share of net income would include a credit to Dhillips Capital for $60000 (to increase Dhillips' equity in the partnership). There would be no need for an Income Summary account or a Drawing account in this situation.

The Partnership of Bher and Dhillips Reports Net Income of $120000