Larry, Curly and Moe formed a partnership that provides residential plumbing services. The business has a December 31 year end. At the beginning of the year, the opening balance in Larry’s capital account was $170,000, Curly’s opening capital balance was $340,000 and Moe’s opening capital balance was $255,000. The business reported a net income of $463,400. Their partnership agreement provided for sharing of net income (loss) on the following basis:
1. Salary allocation of $72,300 to Larry, $100,700 to Curly and $71,300 to Moe
2. Remainder shared where Larry gets 40%, Curly gets 25% and Moe gets 35%.
Prepare a table showing changes in the partners’ capital during the year.
Do not enter dollar signs or commas in the input boxes.
Enter the credit accounts in alphabetical order.
Do not enter use the negative sign in your answers.
Round your answers to the nearest whole number.
| Total | Curly | Larry | Moe | |
| Net Income | Answer | |||
| Salaries | Answer | Answer | Answer | Answer |
| Remainder | Answer | |||
| Share of remainder | Answer | Answer | Answer | Answer |
| Transferred to partner’s capital | Answer | Answer | Answer |
b) Prepare the journal entry to record the distribution of net income. Assume revenues and expenses have been closed to the income summary account.
| Date | Account Title and Explanation | Debit | Credit |
| Dec 31 | AnswerAccounts PayableAccounts ReceivableCapital, CurlyCapital, LarryCapital, MoeCashIncome SummaryService RevenueSupplies ExpenseTelephone ExpenseTravel Expense | Answer | |
| AnswerAccounts PayableAccounts ReceivableCapital, CurlyCapital, LarryCapital, MoeCashIncome SummaryService RevenueSupplies ExpenseTelephone ExpenseTravel Expense | Answer | ||
| AnswerAccounts PayableAccounts ReceivableCapital, CurlyCapital, LarryCapital, MoeCashIncome SummaryService RevenueSupplies ExpenseTelephone ExpenseTravel Expense | Answer | ||
| AnswerAccounts PayableAccounts ReceivableCapital, CurlyCapital, LarryCapital, MoeCashIncome SummaryService RevenueSupplies ExpenseTelephone ExpenseTravel Expense | Answer | ||
| Allocate income to partners |
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