Trevor and Brian Enter into a Partnership and Decide to Share

question 92

Essay

Trevor and Brian enter into a partnership and decide to share profits and losses as follows:
1.The first allocation is a salary allowance with Trevor receiving $10,000 and Brian receiving $20,000.
2.The second allocation is 20% of the partners' capital balances at year end.On December 31,2019,the
capital balances for Trevor and Brian are $50,000 and $40,000,respectively.
3.Any remaining profit or loss is allocated equally.
For the year ending December 31,2019,the partnership reported net income of $50,000.
Required:
1.Calculate the share of profit allocated to each partner.
2.Prepare the journal entry to record the allocation of profit on December 31,2019.

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Definitions:

Consciousness

Consciousness refers to the state of being aware of and able to think about one's environment, thoughts, and experiences.

Social Acceptance

The degree to which an individual is accepted or regarded favorably by society or a social group.

Lymphocytes

The two types of white blood cells that are part of the body’s immune system: B lymphocytes form in the bone marrow and release antibodies that fight bacterial infections; T lymphocytes form in the thymus and other lymphatic tissue and attack cancer cells, viruses, and foreign substances.

Mental Alertness

The state of being keenly attentive, awake, and able to think and react quickly, often influenced by various physiological and psychological factors.