Felix and Ian Allocate 2/5 of Their Partnership's Profits and Losses

question 105

Multiple Choice

Felix and Ian allocate 2/5 of their partnership's profits and losses to Felix and 3/5 to Ian.The net income of the firm is $20,000.The journal entry to close the Income Summary will include ________.

• A) credit to Ian, Capital for $12,000
• B) debit to Felix, Capital for $12,000
• C) debit to Felix, Capital for $8000
• D) credit to Income Summary for $20,000

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Definitions:

Inbound Costs

Expenses related to the transportation, handling, and receiving of goods coming into a business.

Outbound Transportation

The process and cost associated with moving goods from a company's premises to the end customer.

Unit

Refers to a single, complete item of a product or a measure of quantity in terms of number, length, or volume in a given context.

Drop-Shipping

A retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer.