Dividing Net Income or Net Loss

Learning
Partners equally share net income or net loss Objective 3
Identify the bases
unless the partnership contract indicates otherwise. for dividing net
income or net loss.
CLOSING ENTRIES:
1. Debit each revenue account for its balance, and credit Income
Summary for total revenues. Debit Income Summary for total
expenses, and credit each expense account for its balance.
2. Debit Income Summary for its balance, and credit each partner’s
capital account for his or her share of net income. Or, credit
Income Summary, and debit each partner’s capital account for
his or her share of net loss.
3. Debit each partner’s capital account for the balance in that
partner’s drawing account, and credit each partner’s drawing
account for the same amount.
F-11 LO 3