EX 12-26 Partnership entries and statement of partners’ equity

The capital accounts of Gary Menendez and Melissa Breeden have balances of $75,000 and $55,000, respectively, on January 1, 2012, the beginning of the current fiscal year. On April 10, Menendez invested an additional $12,000. During the year, Menendez and Breeden withdrew $44,000 and $35,000, respectively, and net income for the year was $92,000. The articles of partnership make no reference to the division of net income.

a. Journalize the entries to close (1) the income summary account and (2) the drawing accounts.

b. Prepare a statement of partners’ equity for the current year for the partnership of Menendez and Breeden.

Answer:

a. (1) Income Summary.................................................... 92,000    Gary Menendez, Capital....................................  46,000    Melissa Breeden, Capital..................................  46,000  
 (2) Gary Menendez, Capital ......................................... 44,000   Melissa Breeden, Capital........................................ 35,000    Gary Menendez, Drawing..................................  44,000    Melissa Breeden, Drawing................................  35,000  

b. 
MENENDEZ AND BREEDEN Statement of Partners’ Equity For the Year Ended December 31, 2012   Gary Melissa  Menendez Breeden  Total   Capital, January 1, 2012................................. $ 75,000 $ 55,000 $130,000 Additional investment during the year.........  12,000  —  12,000  $ 87,000 $ 55,000 $142,000 Net income for the year .................................  46,000  46,000  92,000  $133,000 $101,000 $234,000 Withdrawals during the year.........................  44,000  35,000  79,000 Capital, December 31, 2012........................... $ 89,000 $ 66,000 $155,000 

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