Required information
Problem 12-4A Partnership income allocation, statement ofpartners' equity, and closing entries LO P2
[The following information applies to the questionsdisplayed below.]
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership bymaking capital contributions of $71,100, $276,500, and $442,400,respectively. They predict annual partnership net income of$471,000 and are considering the following alternative plans ofsharing income and loss: (a) equally; (b) in the ratio of theirinitial capital investments; or (c) salary allowances of $81,600 toMo, $61,200 to Lu, and $92,000 to Barb; interest allowances of 10%on their initial capital investments; and the balance shared asfollows: 20% to Mo, 40% to Lu, and 40% to Barb.
rev: 09_28_2017_QC_CS-102797
Problem 12-4A Part 3
3. Prepare the December 31 journal entry toclose Income Summary assuming they agree to use plan (c) and thatnet income is $471,000. Mo, Lu, and Barb withdraw $36,400, $50,400,and $66,400, respectively, at year-end. Also close the withdrawalsaccounts.
