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Holden,Phillips,and Rogers Are Partners with Beginning-Year Capital Balances of $120,000,$60,000,and

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Essay

Holden,Phillips,and Rogers are partners with beginning-year capital balances of $120,000,$60,000,and $60,000,respectively.Partnership net income for the year is $84,000.Make the necessary journal entry to close Income Summary to the capital accounts if:
a.Partners agree to divide income based on their beginning-year capital balances.
b.Partners agree to divide income based on the ratio of 5:3:2 (Holden:Phillips:Rogers),respectively.
c.Partnership agreement is silent as to division of income and loss.


Definitions:

Investment

The allocation of resources, such as capital, time, or effort, in expectation of generating future profit or income.

Gross Investment

The total amount spent on purchasing new capital and replacing depreciated capital.

Percentage Change

Percentage Change represents the degree to which a value has increased or decreased, expressed as a percentage from its initial value.

Gross Investment

The total amount invested in the production capacity of an economy, including investments in both fixed assets and stocks.

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