Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions...
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Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions of $80,100, $311,500, and $498,400, respectively. They predict annual partnership net income of $523,500 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $85,600 to Bill, $64,200 to Bruce, and $97,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Bill, 40% to Bruce, and 40% to Barb.
| 1. | Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan (c) and that net income is $232,800. Also close the withdrawals accounts. income summary 232800 Bill capital ? Bruce capital ? Barb capital ? |
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