Chapter 5
Partnerships
241
Required
a) Prepare a trial balance with the account balances.
Accounts
Debit
Credit
b) During 2016 the business earned a net income of $150,000. Karthik, Harish and John
withdraw $10,000, $8,000, and $15,000 respectively. Karthik and Harish are entitled
to a salary of$10,000 each. Partners are also entitled to receive 5% interest on capital
(beginning balance). Remaining earnings are divided among the partners in the ratio 1:4:5
to Karthik, Harish and John, respectively. Prepare a statement showing division of profits.
Total
Karthik Harish
John
