ABC Partnership has a profit of $150,000 for the year ended December 31, 2011. The partnership agreement states that profit and losses are to be distributed using salary allowances, interest allowances, and a ratio for the remainder. Information about the agreement and the balance of the Drawings accounts is contained in the table below.
(a) Prepare a detailed schedule to show how the profit would be allocated among the three partners.
(b) Assume that the revenue and expense accounts have been closed. Prepare the remaining closing entries.

Question

ABC Partnership has a profit of $150,000 for the year ended December 31, 2011. The partnership agreement states that profit and losses are to be distributed using salary allowances, interest allowances, and a ratio for the remainder. Information about the agreement and the balance of the Drawings accounts is contained in the table below.
  (a) Prepare a detailed schedule to show how the profit would be allocated among the three partners.
(b) Assume that the revenue and expense accounts have been closed. Prepare the remaining closing entries.

Quizplus · Accepted Answer

The Answer of ABC Partnership has a profit of $150,000 for the year ended December 31, 2011. The partnership agreement states that profit and losses are to be distributed using salary allowances, interest allowances, and a ratio for the remainder. Information about the agreement and the balance of the Drawings accounts is contained in the table below.
  (a) Prepare a detailed schedule to show how the profit would be allocated among the three partners.
(b) Assume that the revenue and expense accounts have been closed. Prepare the remaining closing entries.

ABC Partnership Has a Profit of $150,000 for the Year