Wallace and Simpson formed a partnership with Wallace contributing $92,000 and S

Question

Wallace and Simpson formed a partnership with Wallace contributing $92,000 and Simpson contributing $72,000. Their partnership agreement cars for the income based on the ratio of capital investments. The partnership had income of $205,000 for its first year of operation. When the income summary is closed, the journal partner income is Debit income Summary $205,000, credit Wallace, Capital $102,500; credit Simpson, Capital $102,500 Debit Wallace, Capital $102,500, debit Simpson, Capital $102,5000; credit income Summary $205,000

Explanation / Answer

The correct answer is the third option, i.e Debit income summary $ 205,000 credit wallace capital $ 115,000, credit simpson capital $ 90,000.

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