ESDAY-DECEMBER 12, 2017 (11:45 A.M BTA112.0022 FALL1-2017 Principles of Accounti
ID: 2595085 • Letter: E
Question
ESDAY-DECEMBER 12, 2017 (11:45 A.M BTA112.0022 FALL1-2017 Principles of Accounting I STUDENT NAME: Anain Prof. M. Arias PROBLEM 1 (10 points) Carson &Stem; have capital on provides for annual and any remaining income or loss is to be shared 65% by Carson and 35% by Stern. Sbalances on January 1 of 100,000 and $160,000 respectively. The partnership agreement salaries of $25,000 for Carson and S20 000 for te : interest allowance of 15% on capital b a s Instructions: Prepare a schedule showing the distribution of net income for the partners assuming the partnership had net income of 74,000. Note: Write clearly and use proper labels [do not abbreviate a) DIVISION OF NET INCOME NI Carson Stern Lotal Istaess Allowaace 15,0oo 2 400d 39,oos (3.5o) (o,o) to,ood b) Prepare the closing entries for the division of net ncome. Note: Write clearly and use complete account names Ido not abbreviate) General Journal Account Titles and Explanation RefDebit Credit Date 33,So
Explanation / Answer
(a)
DIVISION OF INCOME
PARTICULARS
CARSON
STERN
TOTAL
Interest Income
15,000
24,000
39,000
Salary income
25,000
20,000
45,000
Total
40,000
44,000
84,000
Partnership Income
74,000
Loss to be shared
(10,000)
Carson’s Share
(6,500)
Stern’s share
(3,500)
Net Division of income
33,500
40,500
74,000
(b)
General Journal
Date
Account Title
Debit
Credit
Dec, 31
Interest
15,000
Salary
25,000
Carson’s Capital
40,000
Dec, 31
Carson’s Capital
6,500
Profit and Loss
6,500
Dec, 31
Interest
24,000
Salary
20,000
Stern’s Capital
44,000
Dec, 31
Stern’s Capital
3,500
Profit and Loss
3,500
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DIVISION OF INCOME
PARTICULARS
CARSON
STERN
TOTAL
Interest Income
15,000
24,000
39,000
Salary income
25,000
20,000
45,000
Total
40,000
44,000
84,000
Partnership Income
74,000
Loss to be shared
(10,000)
Carson’s Share
(6,500)
Stern’s share
(3,500)
Net Division of income
33,500
40,500
74,000
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