Question

1.) Betty and Crocker start a partnership together. Betty contributes cash of $10,000; and equipment of...

1.)

Betty and Crocker start a partnership together.
Betty contributes cash of $10,000; and equipment of $2,000 to start the partnership
Crocker contributes cash of $18,000; and inventory of $5,000, plus a note payable of $2,500
Make the necessary journal entries to show the partnership receiving both partners contributions. Go with two separate journal entries.

2.)  

Betty Crocker partnership made $75,000 for their first year.
Betty will receive a $10,000 salary for the year, while Crocker will receive no salary.
Both partners will receive 7% of their start of the year capital balances (use the capital you credited for each partner in question 1)
The remaining net income is split evenly.
Make the journal entry showing each partner receiving their share of the net income.
Business   Accounting   
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Answer #1

1)

Date Account title Debit credit
a Cash 10000
Equipment 2000
Betty's capital 12000
b cash 18000
Inventory 5000
Note payable 2500
Corcker 's capital 20500

2)

Betty Crocker Total
salary 10000 0 10000
Interest on capital 12000*7%= 840 20500*7%= 1435 2275
Remaining profit (75000-10000-2275 = 62725) 31362.5 31362.5 62725
Total 42202.5 32797.5 75000
Date Account title Debit credit
Income summary 75000
Betty's capital 42202.5
Crocker's capital 32797.5
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