Glencoe Accounting

Chapter 27: Introduction to Partnerships

Homework Practice

Division of Net Income/Net Loss

Partners Joshua Richards and David Woods are considering the following agreements for the division of net income/net loss.

  1. 45% to Richards, 55% to Woods
  2. Equally
  3. Based on initial capital investments of $60,000 for Richards and $90,000 for Woods.

Instructions

Download the general journal form by clicking on Accounting Forms from the Student Center. For each agreement stated above, prepare the journal entries to divide net income/net loss between the partners:

  1. net income of $50,000
  2. net loss of $30,000
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