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Problem 12-4A (Algo) Partnership income allocation, statement of
partners' equity, and closing entries LO P2
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Mo, Lu, and Barb formed the MLB Partnership by making investments
of $72,900, $283,500, and $453,600, respectively. They predict
annual partnership net income of $481,500 and are considering the
following alternative plans of sharing income and loss:
(a) equally; (b) in the ratio of their initial
capital investments; or (c) salary allowances of $82,400
to Mo, $61,800 to Lu, and $93,000 to Barb; interest allowances of
10% on their initial capital investments; and the remaining balance
shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb.
Problem 12-4A (Algo) Part 2
2. Prepare a statement of partners’ equity
showing the allocation of income to the partners assuming they
agree to use plan (c), that income earned is
$481,500; and that Mo, Lu, and Barb withdraw $37,600, $51,600, and
$67,600, respectively, at year-end. (Do not round
intermediate calculations. Enter all allowances as positive values.
Enter losses as negative values.)
Initial partnership investments Net income Total net income Total MLB PARTNERSHIP Statement of Partners' Equity For Year Ended December 31 Mo Lu 0 0 EA 0 0 $ Barb 0 0 $ Total 0 0 0 0 0