PR 12-3A Financial statements for partnership
The ledger of Aiden Durant and Jasmine Adkins, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 2012:
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Aiden, Durant, Adkins |
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Trial Balance |
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December 31, 2012 |
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Debit |
Credit |
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Balances |
Balances |
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Cash |
42,000 |
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Accounts Receivable |
42,300 |
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Supplies |
1,500 |
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Land |
100,000 |
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Building |
108,100 |
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Accumulated Depreciation—Building |
62,500 |
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Office Equipment |
46,000 |
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Accumulated Depreciation—Office Equipment |
19,400 |
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Accounts Payable |
29,800 |
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Salaries Payable |
3,200 |
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Aiden Durant, Capital |
100,000 |
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Aiden Durant, Drawing |
45,000 |
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Jasmine Adkins, Capital |
60,000 |
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Jasmine Adkins, Drawing |
65,000 |
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Professional Fees |
364,500 |
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Salary Expense |
146,000 |
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Depreciation Expense—Building |
14,500 |
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Property Tax Expense |
9,000 |
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Heating and Lighting Expense |
7,200 |
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Supplies Expense |
5,200 |
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Depreciation Expense—Office Equipment |
4,500 |
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Miscellaneous Expense |
3,100 |
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639,400 |
639,400 |
The balance in Adkins’ capital account includes an additional investment of $10,000 made on August 10, 2012.
Instructions
1. Prepare an income statement for 2012, indicating the division of net income. The articles of partnership provide for salary allowances of $40,000 to Durant and $50,000 to Adkins, allowances of 10% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.
2. Prepare a statement of partners’ equity for 2012.
3. Prepare a balance sheet as of the end of 2012.