Financial Accounting 2

Assignment 4
Chapter 12

Q1.Ahmed and Christine have capital balances on 1
st
January 2013 of $900,000 and
$600,000 respectively. The partnership income-sharing agreement provides for :
Annual salaries of $65,000 for Ahmed and $55,000 for Christine,
Interest at 20% on beginning capital balances,
Instructions:
1. Prepare a schedule showing the distribution of net income, assuming net
income is $190,000.
2. Journalize the allocation of net income in each of the situations above.