How to record partnership reports (net income) Accounting Help!! (General Journal) need guidance!?

The Levin and Motes partnership reports net income of $60,000. partner salary allowances are Levin $25,000 and Motes $20,000. No intrest allowance will be used. Any remaining income is shared 60:40 ratio.

I not sure how much of this you’re following, so let’s back up a bit.

The income statement has been completed, indicating a net income of $60,000.

You have the salary allowances correct and the division of the excess income above the salary allowance.

Also, we presume the closing entries have been completed which would indicate a credit balance in income summary of $60,000.

So:

dr income summary 60,000. (this closes income summary)
cr levin capital 34,000.
cr Motes capital 26,000.

In a partnership, the total amount of the net income is divided between the partners, according to their agreement, and each partners total portion is credited to their capital.

We are not given any drawing, Therefore, no entry is required to close their drawing accounts.

If there were drawing accounts, this would be the entry:
dr each partners capital account (reducing their capital)
cr each partners drawing account (to close)

NOTE: There may be an understanding in a partnership agreement, according to the salary allowance etc., that a cap be placed on their drawing until the final income for the year is determined. The cap might be their salary allowance or whatever their agreement consists of.

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