Question 4 Partner Drawings Capital No. Account Titles and Explanation Debit Cre

Question

Question 4

Partner

Drawings

Capital

No.

Account Titles and Explanation

Debit

Credit

1.

2.

3.

LINK TO TEXT

DIVISION OF NET INCOME

Art Niensted

Greg Bolen

Krista Sayler

Total

LINK TO TEXT

Art Niensted

Greg Bolen

Krista Sayler

Total

Question 4

At the end of its first year of operations on December 31, 2017, NBS Company’s accounts show the following.

Partner

Drawings

Capital

Art Niensted $22,600 $42,100 Greg Bolen 13,800 35,500 Krista Sayler 10,200 25,000
The capital balance represents each partner’s initial capital investment. Therefore, net income or net loss for 2017 has not been closed to the partners’ capital accounts.

Explanation / Answer

No. Account Titles and Explanation Debit Credit 1 Income summary 29800 A. Niensted, capital 17880 G. Bolen, capital 8940 K. Sayler, capital 2980 2 Income summary 40200 A. Niensted, capital 19800 G. Bolen, capital 15400 K. Sayler, capital 5000 3 Income summary 18000 A. Niensted, capital 15950 G. Bolen, capital 1550 K. Sayler, capital 500 DIVISION OF NET INCOME Art Niensted Greg Bolen Krista Sayler Total Salary allowance 13740 0 0 13740 Interest allowance on capital 4210 3550 2500 10260 Total salaries and interest 17950 3550 2500 24000 Remaining deficiency -2000 -2000 -2000 -6000 Total division of net income 15950 1550 500 18000 NBS COMPANY Partners' Capital Statement For the Year Ended December 31, 2017 Art Niensted Greg Bolen Krista Sayler Total Capital, January 1 42100 35500 25000 102600 Add: Net income/(loss) 15950 1550 500 18000 58050 37050 25500 120600 Less: Drawings 22600 13800 10200 46600 Capital, December 31 35450 23250 15300 74000

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