Question:
The capital accounts of Hogan adn Moss have balances of $90,000 and $65,000, respectively on January 1, 2011, the beginning of the current fiscal year. On April 10, Hogan adn MOss withdrew $29,000 and $34,000, respectvely, and net income for the year was $120,000. The articles of partnership make no reference to the division of net income.
Required:
(1) Journalize teh entries to:
a) Close the income summary account.
b) Close the drawing account.
c) What is Hogan's capital balance at the end of the year?
2. S. Stephens adn J. Perez are partners in Space designs. Stephens and Perez share income equally. D Fredrick will be admitted to the partnership. Prior to teh admission, equipment was revalued downward by $18,000. The capital balances of each partner are $100,000 adn $139,000, respectively, prior to the revaluation.
Required:
(1) Provide the journal entry for the asset revaluation.
(2) Provide teh journal entry for Fredricks' admission under the following independent situations:
a. Fredricks purchased a 25% interest for $75,000.
b. Fredricks pruchased a 35% interest for $115,000.