Glade, Marker, and Walters are partners with beginning-year capital balances of $100,000, $50,000, and $50,000, respectively. Partnership net income for the year is $84,000. Make the necessary journal entry to close Income Summary to the capital accounts if: a. Partners agree to divide income based on their beginning-year capital balances.b. Partners agree to divide income based on the ratio of 5:3:2 (Glade:Marker:Walters), respectively.c. Partners agree to divide income equally.

What will be an ideal response?



(a)Income Summary……………………………………84,000?
?  Glade, Capital ($84,000 × ($100,000/$200,000))…?42,000
?  Marker, Capital ($84,000 × ($50,000/$200,000))…?21,000
?  Walters, Capital ($84,000 × ($50,000/$200,000))…?21,000
????
(b)Income Summary……………………………………84,000?
?  Glade, Capital ($84,000 × 5/10)……………………?42,000
?  Marker, Capital ($84,000 × 3/10)…………………?25,200
?  Walters, Capital ($84,000 × 2/10)…………………?16,800
????
(c)Income Summary……………………………………84,000?
?  Glade, Capital ($84,000 × 1/3)……………………?28,000
?  Marker, Capital ($84,000 × 1/3)……………………?28,000
?  Walters, Capital ($84,000 × 1/3)…………………?28,000

Business

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