Groucho,Harpo,and Chico Form a Partnership on January 1,2018

Essay

Groucho,Harpo,and Chico form a partnership on January 1,2018.Groucho contributes $90,000,Harpo $70,000,and Chico $40,000 to a business called Marx Brothers' Partnership.On a monthly basis,each partner is allocated income and is allowed to receive cash from the business in proportion to the capital they provided.Assume that Groucho receives $2,700 cash per month.
Required:
Part a.Prepare the journal entry for the initial investment.
Part b.Determine the monthly distribution amounts for each of the three partners.
Part c.Prepare the journal entry that would be made in one month for the monthly distribution.
Part d.Prepare the journal entry for the allocation of an annual net income of $84,000.For purposes of this journal entry,assume Sales Revenue totaled $116,000 and that all expenses,totaling $32,000,were recorded in a single account called Operating Expenses.
Part e.Prepare the journal entry to close the Drawings accounts at the end of the year.
Part f.Prepare a Statement of Partners' Equity (assume no additional investments made).