Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions of $74,700, $290,500, and $464,800, respectively. They predict annual partnership net income of $492,000 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $83,200 to Bill, $62,400 to Bruce, and $94,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Bill, 40% to Bruce, and 40% to Barb.
Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan (c) and that net income is $222,600. Also close the withdrawals accounts.
Record the entry to close the income summary account assuming the partners agree to use plan(c) and net income is $222,600.
Record the entry to close the partners' withdrawals accounts. (Bill, Bruce, and Barb withdraw $38,800, $52,800, and $68,800, respectively, at year-end.)