Question - Carson & Smith, Inc. reports net income of $45,000. The partnership agreement provides for annual salaries of $23,000 for Carson and $19,000 for Smith and interest allowances of $5,000 to Carson and $3,000 to Smith. Any remaining income or loss is to be shared 60% by Carson and 40% by Smith. Instructions: a) Determine the amount of net income allocated to each partner. b) Prepare the closing entries for the division of net income.
a) Determine the amount of net income allocated to each partner.
b) Prepare the closing entries for the division of net income.