Prepare the closing entries to transfer net income

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Question - The Scott Stewart and Rick Smith Partnership earned a net income of $90,000 for the current year. Beginning capital balances were $70,000 for Stewart and $140,000 for Smith. Prepare the closing entries to transfer net income to the partners' capital accounts based on the following independent net income agreements.

a) No mention of net income agreement.

b) Interest on beginning capital balances of 12%, balance divided in a ratio of 3:2, respectively.

c) Interest on beginning capital balances of 10%, secondly $45,000 to Stewart and $50,000 to Smith based on service and the balance divided equally.

Reference no: EM132288864

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