Question

​Alex, Brad, and Carl are partners. The profit sharing rule between them is 3​:2​:3 in alphabetical order. The partnership incurs a net loss of $ 110 comma 000. The journal entry to close Income Summary will include a​ _______. (Do not round any intermediate​ calculations.)

Answer 1

Answer:

Alex, Capital account will have a debit balance of $41,250

Explanation:

Partnerships are formed between individuals that come together and pool their resources together to achieve a common goal. They agree to share profits and losses of a business enterprise.

In this case profit sharing is done in a 3:2:3 order.

So for Alex his share of the $110,000 loss will be

Alex's share= (3/3+2+3)*110,000

Alex's share= (3/8)*110,000

Alex's share= $41,250

So this amount will be submitted from Alex's capital account