After Closing the Temporary Owners' Equity Accounts into Income Summary

question 28

Multiple Choice

After closing the temporary owners' equity accounts into Income Summary, and after allocating the net income and closing the partners' drawing accounts, assume the partners' capital accounts had credit balances as follows: Ryan, $40,000; O'Malley, $60,000; Sullivan, $45,000. Partners share profits and losses as follows: Ryan, 20%; O'Malley, 30%; and Sullivan, 50%. If Sullivan retired and withdrew $40,000 in settlement of his/her equity and settlements are allocated according to capital interests, the amount entered in Ryan's capital account would be a

• A) $2,000 credit.
• B) $2,000 debit.
• C) $3,000 credit.
• D) $3,000 debit.

---

Definitions:

Butcher

A professional who prepares meat for sale, often by slaughtering animals, dressing their flesh, and cutting it into pieces.

Laterally Rotate

To rotate a limb or an organ around its long axis away from the midline of the body.

Trapezius

A large, triangular muscle extending over the back of the neck and shoulders, responsible for moving the scapula and support of the arm.

Levator Scapulae

A muscle in the back and side of the neck that elevates the scapular (shoulder blade).