What Is the Closing Entry to Allocate Net Income of $48,000

question 122

Multiple Choice

What is the closing entry to allocate net income of $48,000 to Sara,Ellen,and Mary? Respective capital balances are $30,000,$40,000,and $30,000.No agreement was made for division of income.

• A)Debit Income Summary $48,000; credit Sara,Capital $16,000; credit Ellen,Capital $16,000; credit Mary,Capital $16,000
• B)Debit Income Summary $48,000; credit Sara,Capital $14,400; credit Ellen,Capital $19,200; credit Mary,Capital $14,400
• C)Debit Salary Expense $48,000; credit Salaries Payable $48,000
• D)Net income cannot be allocated.

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