Present general journal entries to record initial capital

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Question - On April 1, 2020, Harry Regal and Meghan Merle formed a partnership in Alberta, renting reusable moving boxes.

Regal Merle

Contribution $97,000 cash $137,000 land $50,000 building

Profit sharing $107,000 salary allowance 15% of original capital investments 15% of original capital investments

Cash withdrawal during year $77,000 $62,000

Net Income during the year was $177,000 and was in the Income Summary account. The partners agreed to share profit by allowing salary allowance, interest on their initial investments, and sharing the balance equally.

Required -

1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income Summary and withdrawals accounts.

2. Determine the balances of the partners' capital accounts as of the end of 2020.

3. Shows your rough work on shares of the partners.

Reference no: EM132601653

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