Chapter 5
Partnerships
223
c) Independent of part b), suppose it was decided that Biyanka Lee will receive 10%, Bob
Fire will receive 25%, Larry Ding will receive 40%, and Freeda Red will receive 25% of the
profits. During 2016, the company had a net loss of $15,000. Prepare the journal entry on
December 31, 2016 to close the income summary account at year-end.
Date
Account Title and Explanation
Debit
Credit
d) Independent of parts b) and c), suppose it was decided that the earnings will be divided
based on each partner’s capital contribution. During 2016, the company earned a net
income of $86,000. Prepare the journal entry on December 31, 2016 to close the income
summary account at year-end.
Date
Account Title and Explanation
Debit
Credit
