Answer:
Debit Income summary $90,000
Credit Duffy, capital $72,000
Credit Gladwin, capital $18,000
Explanation:
To close income summary account to partner’s capital, said account must be debited then credit partner’s account in the amount based on the agreed allocation ratio.
Computation of allocation: (based on beginning capital balances)
Duffy $80,000
Gladwin $20,000
——————————
Total $100,000
Duffy (80,000/100,000) x 90,000 = $72,000
Gladwin (20,000 x 100,000) x 90,000 = $18,000
JOURNAL ENTRY:
Debit income summary $90,000
Credit Duffy, capital $72,000
Credit Gladwin, capital $18,000
