Question

30) Bob and Bill allocate 2/3 of their partnership's profits and losses to Bob and 1/3 to Bill. The net income of the firm is $20,000. The journal entry to close the Income Summary will include ________. (Do not round any intermediate calculations.)

A) credit to Income Summary for $13,333

B) debit to Bob, Capital for $6667

C) credit to Bob, Capital for $13,333

D) credit to Income Summary for $20,000;   E) None of the above

31) Felix and Ian allocate 2/5 of their partnership's profits and losses to Felix and 3/5 to Ian. The net income of the firm is $20,000. The journal entry to close the Income Summary will include ________.

A) credit to Ian, Capital for $12,000

B) debit to Felix, Capital for $12,000

C) debit to Felix, Capital for $8000

D) credit to Income Summary for $20,000; E) None of the above

32) Adam, Bill, and Charlie are partners. The profit and loss sharing rule between them is 4:6:1, with Bill receiving the largest share and Charlie receiving the smallest. The partnership incurs a net loss of $72,000. While closing the Income Summary ________. (Do not round any intermediate calculations.)

A) Income Summary will be debited for $72,000

B) Adam, Capital will be debited for $26,182

C) Adam, Capital will be credited for $39,273

D) Charlie, Capital will be credited for $39,273

E) None of the above

33) When a new partner is admitted to a partnership by purchasing an existing partner's interest, the business's accounting records do not record the transfer of cash from the new partner to the existing partner. A. True; ____or B.False ____

34) ) Admission of a new partner, by contributing directly to the partnership, increases both assets and liabilities by the same amount. A. True; ____or B.False ____

Answer 1

30. Answer is (C) Credit to Bob $13333. The journal entry for the same would be

• Income Summary Dr 20000
• Bob, Capital Cr 13333 (20000*2/3)
• Bill, capital Cr 6667 (20000/3)

31. Answer is (A) Credit to Lan Capital 12000. The journal entry for the same is

• Income Summary Dr 20000
• Felix, Capital Cr 8000 (20000*2/5)
• Lan, Capital Cr 12000 (20000*3/5)

32. Answer is (B) Adam Capital would be debited for $26182. The journal entry for the same is

• Adam, Capital Dr 26182
• Bill, Capital Dr 39273
• Charlie, Capital Dr 6545
• Income summary Cr 72000

33.