The Profit and Loss Sharing Agreement for the Tuttle,Upman,and Veer

question 8

Essay

The profit and loss sharing agreement for the Tuttle,Upman,and Veer partnership provides for residual profits and losses to be allocated 2:3:6 to Tuttle,Upman,and Veer,respectively.In 2011,the partnership recorded $11,000 of net income that was properly allocated to the partners' capital accounts.On January 18,2012,after the books were closed for 2011,Tuttle discovered that the $16,500 payment for the partnership's liability and workers compensation insurance for 2012 was recorded as insurance expense when it was paid on December 28,2011.
Required:
Prepare the necessary correcting entry(s)for the partnership.

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Definitions:

Business Overview

An outline that provides a high-level summary of a company's mission, operations, market position, and financial health.

Statement of Cash Flows

A Statement of Cash Flows is a financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Profit and Loss

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, indicating the net profit or loss.

Adjusted Trial Balance

A financial statement that displays all balances of accounts after adjusting entries have been made at the end of an accounting period, ensuring the ledger's accuracy.