What is the closing entry to allocate a net income of $48,000 to Sara, Ellen, and Mary? Respective capital balances are $30,000, $40,000, and $30,000. No agreement was made for division of income.

A. Debit Income Summary $48,000; credit Sara’s Capital $16,000; credit Ellen’s Capital $16,000; credit Mary’s Capital $16,000

B. Debit Income Summary $48,000; credit Sara’s Capital $14,400; credit Ellen’s Capital $19,200; credit Mary’s Capital $14,400

C. Debit Salary Expense $48,000; credit Salaries Payable $48,000

D. Net income cannot be allocated.

I believe the answer is C

I think its D

The correct answer is A. Debit Income Summary $48,000; credit Sara’s Capital $16,000; credit Ellen’s Capital $16,000; credit Mary’s Capital $16,000.

In the absence of any agreement for the division of income, the net income of $48,000 is allocated evenly among Sara, Ellen, and Mary based on their respective capital balances. Each partner's capital account is credited with $16,000, which represents their share of the net income. No other accounts, such as Salary Expense or Salaries Payable, are involved in this closing entry.

Actually, the correct answer is A. To allocate the net income to Sara, Ellen, and Mary, you would need to debit the Income Summary for the amount of the net income, which is $48,000. Then, you would credit Sara's Capital with $16,000, credit Ellen's Capital with $16,000, and credit Mary's Capital with $16,000.

This transaction effectively transfers the net income from the Income Summary account to the individual capital accounts of Sara, Ellen, and Mary in the ratio of their respective capital balances. No agreement was made for the division of income, so it is being allocated equally among the three partners.