[aahhmm]

At the end of its first year of opelations on December 31, 2005, tara company
Accounts show the following'
Partner Drawings Capital
Rhett Butler 23,000$ 48,000$
Scarlet O'Hara 14,000$ 30,000$
Ashley Wilkes 10,000$ 25,000$

The capital balance represent each partner initial capital investment,therefore,net income or net loss for 2005 has not been closed to the partner,capital accounts
Lnstructions
(a) Journalize the entry to record the division of net income tor the year 2005 under each of
The following independent assumptions'
(1) Net income is $24,000' Income is shared 6 : 3 : 1'
(2) Net income is $37,000. Butler and O'Hara are given salarly allowances ol $18,000 and
$10,000, respectively. The remainder is shared equally''
(3) Net income is 22,000.Each partner is allowed interest of l0% on beginning capital
Balances. Butler is given 12,000$ salarly allowance.the reminder is shared equally.
(b) prepare a scheduie showing the division of net income under assumption (3) above
(c) prepare partner,capital statement for year under assumption (3) above

[Just Looking]

Just take them one at a time. I'll do the first to show you an example.

1) Net income is to be divided 60%, 30% and 10%

Income Summary..................24,000
Capital, Rhett Butler............................14,400
Capital, Scarlett O'Hara.........................7,200
Capital, Ashley Wilkes............................2,400

2) In this example, the salaries of $28,000 are paid, leaving a balance of $9,000 to be distributed equally among the partners. Can you write the journal entry to do this?

3) Net income is $22,000. Butler gets $12,000 salary, now leaving $10,000. Each partner gets interest on capital investment at 10%, so for example Butler gets 10% of his initial investment of $48,000. After computing each interest amount, you'll have the amount to be spread equally. It is spread equally whether it is a net income or a net loss.
Part B asks for a statement of partners capital. It would be formatted as:

Beginning Capital Balance

Add: Investments
.........Net Income (loss)

Less: Withdrawals

Ending Capital Balance