Alex Jeffers, Jo Ford, and Rose Verne invested $32,500, $45,500, and $52,000, respectively, in a partnership. During its first calendar year, the firm earned $391,200.

Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $391,200 net income to the partners under each of the following separate assumptions: 1) have no agreement on the method of sharing income and loss 2) agreed to share income and loss in the ratio of their beginning capital investments and 3) agreed to share income and loss by providing annual salary allowances of $40,000 to Jeffers, $35,000 to Ford, and $46,000 to Verne; granting 8% interest on the partners' beginning capital investments and sharing the remainder equally.

Please read this announcement.
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I will give you a way to get started. If you will post your work, we can check it and guide you from there.

1) Look up the rules in your text or online as to how to handle this when no agreement exists. We'll verify your understanding.

2) You have the three capital investments. Total them, and then calculate the percent each partner has. This percent is applied to the income for each partner.

3) You are given three salaries. You can compute the 8% on their capital investments. Add the total salaries and the total interest. You can then figure the remainder.

If you'll do this, you can post your answers for review. From there you are asked to write journal entries.