Felix and Ian allocate 2/5 of the profits and losses to Felix and 3/5 to Ian. The net income of the firm is $30,000. The journal entry to close the Income Summary will include:
A)credit to Ian, Capital for $18,000.
B)debit to Felix, Capital for $18,000.
C)debit to Felix, Capital for $12,000.
D)credit to Income Summary for $30,000.

Question

Quizplus · Accepted Answer

Ian's share of the net income is 3/5 of $30,000, which is $18,000. Therefore, the journal entry will include a credit to Ian, Capital for $18,000.

Felix and Ian Allocate 2/5 of the Profits and Losses