Journalize the entry to record the division of net income

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Reference no: EM132805980

Question - At the end of its first year of operations on December 31, 2020, Ivanhoe Company's accounts show the following.




Art Niensted



Greg Bolen



Krista Sayler



The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2020 has not been closed to the partners' capital accounts.

To record the division of net income for the year 2020 under each of the following independent assumptions.

1. Net income is $30,700. Income is shared 6:3:1.

2. Net income is $40,500. Niensted and Bolen are given salary allowances of $15,200 and $10,000, respectively. The remainder is shared equally.

3. Net income is $19,100. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $15,490 salary allowance. The remainder is shared equally.

A schedule showing the division of net income under assumption (3) above. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).)


Art Niensted

Greg Bolen

Krista Sayler


Salary allowance





Interest allowance on capital





Total salaries and interest





Remaining excess / deficiency





Total division of net income





Required - Journalize the entry to record the division of net income for the year 2020 under each of the above independent assumptions.

Reference no: EM132805980

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