Dana and Emile allocate 2/3 of the profits and losses to Dana and 1/3 to Emile. The net income of the firm is $30,000. The journal entry to close the Income Summary will include:

Question

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The journal entry to close the Income Summary would require a debit equal to the net income of $30,000 and a credit to balance it out. The allocation of profits and losses between Dana and Emile is irrelevant in this step.

Dana and Emile Allocate 2/3 of the Profits and Losses