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The partnership agreement of Ale Ca and Eri provides that profits are to be divided as follows Ale is to receive a salary allowance of $10000 for managing the partnership business

The partnership agreement of Ale, Car, and Eri provides that profits are to be divided as follows: 1. Ale is to receive a salary allowance of $10,000 for managing the partnership business. 2. Partners are to receive 10 percent interest on average capital balances. Drawings are excluded from computing these averages. 3. Remaining profits are to be divided 30 percent, 30 percent, and 40 percent to Ale, Car, and Eri, respectively. Ale had a capital balance of $60,000 at January 1, 2016, and had drawings of $8,000 on July 1, 2016. Car s capital balance on January 1, 2016, was $90,000, and he invested an additional $30,000 on September 1, 2016. Eri s beginning capital balance was $110,000, and she withdrew $10,000 on July 1 but invested an additional $20,000 on October 1, 2016. The partnership has a net loss of $12,000 during 2016, and the accountant in charge allocated the net loss as follows: $200 profit to Ale, $4,800 loss to Car, and $7,400 loss to Eri. REQUIRED 1. A schedule to show the correct allocation of the partnership net loss for 2016 2. A statement of partnership capital for the year ended December 31, 2016 3. Journal entries to correct the books of the partnership at December 31, 2016, assuming that all closing entries for the year have been recorded.

Apr 10 2020 View more View Less

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