During the course of the partnership business, any partner may ask for the withdrawal of funds or other assets. Such withdrawal is recorded into the drawing account of each partner. Just like the sole proprietors accounting, the drawing account is maintained for each partner in the accounting system.
Example Question
Adam, Boon, and Chelsey are the three partners in the partnership firm ABC. In the operations of the business, following drawings happen from the business:
Adam withdrew furniture costing $70,000 and cash $50,000.
Boon withdrew vehicle $120,000 and cash $30,000.
Chelsey withdrew inventory $80,000 and cash $60,000.
Required:
Journalize the above transactions.
Close the drawing account of each partner in the partnership firm.
Solution
| Description | Debit | Credit |
| Adam’s drawing | 120,000 | |
| Cash | 70,000 | |
| Furniture | 50,000 | |
| Boon’s drawing | 150,000 | |
| Cash | 30,000 | |
| Vehicle | 120,000 | |
| Chelsey’s drawing | 140,000 | |
| Inventory | 80,000 | |
| Cash | 60,000 | |
| Journal Entry toclose drawing accounts: | ||
| Adam’s capital | 120,000 | |
| Boon’s capital | 150,000 | |
| Chelsey’s capital | 140,000 | |
| Adam’s drawing | 120,000 | |
| Boon’s drawing | 150,000 | |
| Chelsey’s drawing | 140,000 |