The partnership of Hiller and Roundtree, CPAs, showed revenues of $195,000 and expenses of $52,000 on their year end work sheet. Their capital balances as of January 1, 20 , were $52,000 for B. Hiller and $48,000 for O. Roundtree. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $60,000 for Hiller and $40,000 for Roundtree, the partners each withdrew 5% interest on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 45 55 basis.
Required
1. Prepare the lower portion of the income statement of the partnership for the year ended December 31, 20 , showing the division of the partnership net income for the year.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hide Feedback Partially Correct
2. Prepare a statement of partners’ equity for the year ended December 31, 20 .
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hide Feedback Partially Correct
Prepare the partners’ equity section of the balance sheet on that date.
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Hide Feedback Partially Correct
3. Prepare closing entries for the partnership as of December 31, 20 : (a.) Close Revenue, (b.) Close Expenses, (c.) Close Net Income/Net Loss, (d.) Close Drawing accounts. (For simplicity, use the account titles “Revenues” for all revenues and “Expenses” for all expenses.) If an amount box does not require an entry, leave it blank.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hide Feedback