The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $44,880 and $71,910, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an additional $7,750. During the year, Grecco and Rosenfeld withdrew $30,730 and $38,870, respectively, and net income for the year was $62,000. Revenues were $483,000, and expenses were $421,000. The articles of partnership make no reference to the division of net income. Required: a. Journalize the entries to close (1) the revenues and expenses and (2) the drawing accounts on December 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. b. Prepare a statement of partnership equity for the current year for the partnership of Grecco and Rosenfeld. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If a net loss is incurred or there is a decrease in partnership’s equity, enter that amount as a negative number using a minus sign.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $44,880 and $71,910, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an additional $7,750. During the year, Grecco and Rosenfeld withdrew $30,730 and $38,870, respectively, and net income for the year was $62,000. Revenues were $483,000, and expenses were $421,000. The articles of partnership make no reference to the division of net income.

Required:

Journalize the entries to close (1) the revenues and expenses and (2) the drawing accounts on December 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

Prepare a statement of partnership equity for the current year for the partnership of Grecco and Rosenfeld. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If a net loss is incurred or there is a decrease in partnership’s equity, enter that amount as a negative number using a minus sign.

1
2
3
4
5
6
7
8
9
DATE
Dec. 31
Revenues
DESCRIPTION
Closing Entries
Expenses
Lorraine Grecco, Capital
Carrie Rosenfeld, Capital
Lorraine Grecco, Capital
Carrie Rosenfeld, Capital
Lorraine Grecco, Drawing
Carrie Rosenfeld, Drawing
JOURNAL
S
>
S
S
>
POST. REF.
DEBIT
483,000.00
31,000.00
31,000.00
CREDIT
421,000.00
31,000.00
31,000.00
30,730.00
38,870.00
ASSETS
PAGE 10
ACCOUNTING FOLIATION
LIABILITIES
Score: 92/99
EQUITY
↓
↑
↑
↑
↓
↓
↑
↑

1
2 Balances, January 1, 20Y4
3 Additional investment during the year
4 Net income for the year
5 Withdrawals during the year
6 Balances, December 31, 20Y4
Grecco and Rosenfeld
Statement of Partnership Equity
For the Year Ended December 31, 20Y4
Lorraine Grecco
$44,880.00
7,750.00
31,000.00
30,730.00
$52,900.00
Carrie Rosenfeld
$71,910.00
31,000.00
40,410.00
$62,590.00
Score: 68/86
Total
$116,790.00
7,750.00
62,000.00
72,640.00
$116,570.00

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