Question

Farmer and Taylor formed a partnership with capital contributions of $280,000 and $330,000, respectively. Their partnership agreement calls for Farmer to receive a $102,000 per year salary. The remaining income or loss is to be divided equally. Assuming net loss for the current year is $31,000, the journal entry to allocate the net loss is:a. Debit Income Summary, $31,000; Debit Farmer, Capital, $35,500; Credit Taylor, Capital, $66,500.b. Debit Income Summary, $31,000; Credit Farmer, Capital, $15,500; Credit Taylor, Capital, $15,500.c. Debit Taylor, Capital, $66,500; Credit Income Summary, $31,000; Credit Farmer, Capital, $35,500.d. Debit Income Summary, $31,000; DebitTaylor, Capital, $35,500; Credit Taylor, Capital, $66,500.e. Debit Income Summary, $31,000; Credit Taylor, Capital, $15,500; Credit Farmer, Capital, $15,500.

Answer 1

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