Lori and Mike Enter into a Partnership and Decide to Share

question 153

Multiple Choice

Lori and Mike enter into a partnership and decide to share profits and losses as follows: 1.The first allocation is a salary allowance with Lori receiving $12,000 and Mike receiving $25,000.
2) The second allocation is 20% of the partners' capital balances at year end.On December 31,2019,the capital balances for Lori and Mike are $86,000 and $344,000,respectively.
3) Any remaining profit or loss is allocated equally.
For the year ending December 31,2019,the partnership reported a net loss of $122,000.The journal entry to record the loss allocation will ________.

• A) debit Lori, Capital for $93,300
• B) debit Lori, Capital for $28,700
• C) debit Mike, Capital for $93,800
• D) credit Mike, Capital for $93,800

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Definitions:

Oxytocin

A hormone and neuropeptide that plays a significant role in social bonding, sexual reproduction, childbirth, and the period after childbirth.

Hormone

Chemical messengers produced by glands that regulate bodily functions by traveling through the bloodstream.

Ectodermal Cells

Cells originating from the outermost layer of the embryo, which give rise to the epidermis, nervous system, and some sensory organs.

Neural Tube

The embryonic precursor to the central nervous system, which develops into the brain and spinal cord in vertebrates.