Exereise 12-5 Coburn (beginning capital, $57,000) and Webb (beginning capital $9

Question

Exereise 12-5 Coburn (beginning capital, $57,000) and Webb (beginning capital $90,000) are prtners. During 2017, the partnership eaned net income of $66,000, and Coburn made drewings of $14,000 while Webb made drawings of $24,000. tah er norme to be divided 35% toCabrn and 65% to wete. Prepare the journal entry to record the alloatin of net inte (aedt account nea ae automaeawp Assume the partnership income-sharing agreement when amount is entered. Do net indent manually,) LINK TO TEXT -arte la hethe part ership inco me haring agreement calls b inome to be divided th a salayof$34 000 to Coburn and 127 000 to webwth th-reunde delded 35% to Coeur,and 65% te wwe teee the a rd the allocation of ret none. (Crede ac titles are automatically indented when amount enter Do not indent man ally.) Aoceunt Titles and Assure the pa tersip in e haring agreement calls for nome to bé dided en a salry of S35,000 to cars and $30 000 to webe interest of 11% on begin ng capital, and the reside added 50%-50%. Prepare the journal entry to recard the allocation of net income. (Credit account tities ave automatiralty ndented when amoued tered. De mot indent manuay- Account Titles and Txplanation Debit Credit LINK TO TEXT Compute the partners ending capital balances under the assumption in part (c) above Ending capital

Explanation / Answer

Jurnal Entries in different senario

Partners Ending Capital balance using assumption C :

Beginning Capital + distribution under assumption C - drawing made

Coburn ' Capital : $57,000 +$33,685 - $14,000 = $76,685

Webb ' Capital : $90,000 +$32,315 - $24,000 = $98,315

Account Titles & Explanation Debit ($) Credit ($) a) Income Summary 66,000 Coburn ' Capital ($66,000 *35 %) 23,100 Webb ' Capital ($66,000 *65 %) 42,900 b) Income Summary 66,000 Coburn ' Capital [$34,000+ ($5,000 *35 %) ] 35,750 Webb ' Capital [ $27,000 + ($5,000 *65 %) ] 30,250 c) Income Summary 90,000 Coburn ' Capital [$35,000+$6,270 - ($15,170 *50 %) ] 33,685 Webb ' Capital [ $30,000 + $9,900 - ($15,170 *50 %) ] 32,315

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