At the end of its first year of operations, December 31, 2014,ZYX Company’s unadjusted accounts show the following:(Partner) A. Applebaum – Drawings: $23000 – Capital $50000
(Partner) B. Butterscott – Drawings: $14000 – Capital $30000(Partner) C. Copperfeld – Drawings: $10000 – Capital $20000The capital balance above represents each partner’s capital initialcapital investment. No closing entries have been recorded for netcome (loss) or drawings as yet.
(A) journalize the entry to record the division of net income forthe year ended Dec. 31, 2014 under each of the followingindependent assumptions:(1) Net income is shared on the ration of their initialinvestments. Net income is $47000.(2) Net income is $34000. Butterscott and Copperfeld are givensalary allowances of $15000 and $10000 respectively. The remainderis shared equally.(3) Net income of $23000. Each partner is allowed interest of 5% onbeginning capital balances. Copperfeld is given a $15000 salaryallowance. The remainder is shared equally.
(B) Journalize the entry to close each partner’s drawingsaccount.
(C) Prepare a statement of partners’ equity for the year end underassumption #3 in part (A) above.
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