Farrell and Jimmy Enter into a Partnership Agreement on May $$\begin{array} { | c | c | c | } \hline \text { Farrell, Capital } & 46,667 & \\\hline \text { Jimmy, Capital } & & 46,667 \\\hline\end{array}$$

question 82

Multiple Choice

Farrell and Jimmy enter into a partnership agreement on May 1,2018.Farrell contributes $60,000 and Jimmy contributes $120,000 as their capital contributions.They decide to share profits and losses in the ratio of their respective capital account balances.The net income for the year ended December 31,2018 is $70,000.Which of the following is the correct journal entry to record the allocation of profit? (Do not round any intermediate calculations.Round your final answers to the nearest dollar.)

• A) \[\begin{array} { | c | c | c | }
• \hline \text { Farrell, Capital } & 46,667 & \\
• \hline \text { Jimmy, Capital } & & 46,667 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | c | }
• \hline \text { Income Summary } & 70,000 & \\
• \hline \text { Farrell, Capital } & & 23,333 \\
• \hline \text { Jimmy, Capital } & & 46,667 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | l | }
• \hline \text { Farrell, Capital } & 23,333 & \\
• \hline \text { Jimmy, Capital } & 46,667 & \\
• \hline \text { Income Summary } & & 70,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | l | }
• \hline \text { Income Summary } & 23,334 & \\
• \hline \text { Farrell, Capital } & 23,333 & \\
• \hline \text { Jimmy, Capital } & & 46,667 \\
• \hline
• \end{array}\]

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Definitions:

Short Run

The time period in which at least one input is fixed.

U.S. Imports

Products and services purchased by United States residents from foreign nations.

Japanese Producers

Japanese producers refer to businesses or individuals based in Japan engaged in the production of goods or services, known for their innovation and quality across various industries.

Tariff

A levy placed by a government on imports to manage trade amounts and safeguard local sectors.