The Partnership of Lane and Starr Reports Net Income of $60,000

question 177

Multiple Choice

The partnership of Lane and Starr reports net income of $60,000. The partners share equally in income and losses. The entry to record the partners' share of net income will include a

• A) credit to Income Summary for $60,000.
• B) credit to Lane, Capital for $30,000.
• C) debit to Starr, Capital for $30,000.
• D) credit to Starr, Drawing for $30,000.

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Definitions:

Product Costs

The costs directly associated with the production of goods or services, including raw materials, labor, and manufacturing overhead.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, the government, and other interested parties.

Units

A measure of quantity, such as items or pieces, used in production and inventory contexts.

Mixed Cost

A cost composed of both fixed and variable components, changing in total with activity level but not proportionally.