Problem 11-6A Partnership entries, profit allocation, admission of a partner LO2, 3, 4 On June...
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Accounting
Problem 11-6A Partnership entries, profit allocation, admission of a partner LO2, 3, 4
On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $293,000 cash and $386,000 of equipment, respectively. The partnership also assumed responsibility for a $53,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $163,000, both are to receive an annual interest allowance of 5% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $113,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $510,000. On June 1, 2021, Peter Williams invested $133,000 and was admitted to the partnership for a 20% interest in equi
ty.
Required:
1. Prepare journal entries for the following dates.
a. June 1, 2020
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