On January 1, 2021, Lamb and Mona LLP Admitted Norris

question 84

Essay

On January 1, 2021, Lamb and Mona LLP admitted Norris to a 20% interest in net assets for an investment of $50,000 cash. Prior to the admission of Norris, Lamb and Mona had net assets of $100,000 and an income-sharing ratio of 25% to Lamb and 75% to Mona. After the admission of Norris, the partnership contract included the following provisions:Salary of $40,000 a year to Norris.Remaining net income in ratio Lamb 20%, Mona 60%, Norris 20%.During the fiscal year ended December 31, 2021, the partnership had income of $90,000 prior to recognition of salary to Norris.Record the journal entry to record the remainder of net income to the capital accounts.

---

Definitions:

Demand Decreases

A situation where the quantity of goods and services that consumers are willing and able to purchase at a given price level declines.

Maximum Rent

Government-imposed limits on the amount a landlord can charge for leasing a property, typically to make housing more affordable.

Government

The governing body of a nation, state, or community, usually responsible for policymaking, administration, and regulation.

Units

Basic quantities or measurements used to express variables, such as meters for length or kilograms for weight.