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20 January, 18:29

The partnership agreement of Martinez and Magden states that L. Martinez will receive 50% of all income and losses. During the current period, the company has net income of $70,000. To close the Income Summary account and give Martinez her share of net income, the partnership

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  1. 20 January, 18:57
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    The partnership will credit the L. Martinez, Capital account for $35,000

    Explanation:

    Given

    Net Income = $70,000

    Percentage Share of income and loss = 50%

    Since, it's an income, then Martinez will be credited.

    Amount to be credited is calculated as follows.

    Amount = Net Income * Percentage Share of income and loss

    By Substituton

    Amount = $70,000 * 50%

    Amount = $70,000 * 50/100

    Amount = $70,000 * ½

    Amount = $70,000/2

    Amount = $35,000

    Hence, the partnership will credit the L. Martinez, Capital account for $35,000
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