Chapter 5
Partnerships
224
AP-4A (
4
)
Mallory Longshore, Lakisha Laffey and Avis Hemsley set up a partnership at the beginning
of 2016. Mallory contributed $10,000 in cash. Lakisha contributed a van worth $20,000. Avis
contributed equipment worth $15,000. The partnership made $9,000 net income for the
year. According to the partnership agreement, profits are divided in the ratio of their initial
contributions.
Required
a) Record the entry for the division of the profit on December 31, 2016. Assume that
revenues and expenses have already been closed to the income summary account.
Date
Account Title and Explanation
Debit
Credit
b) Assume that the partnership recorded a loss of $4,500. Record the entry for the division
of the loss. Assume that revenues and expenses have already been closed to the income
summary account.
Date
Account Title and Explanation
Debit
Credit
