Jill Emerson owned a pet shop. On August 1, 2003, Emerson accepted Allan Jacobs as a partner. At that time, Emerson s capital account showed a balance of $135,000. Jacobs contributed $90,000 cash for a 40% share in both capital and earnings. During the rest of 2003, the following transactions took place:
a. Emerson withdrew $12,000 and Jacobs withdrew $4,000.
b. Emerson invested another $4,500 cash, and Jacobs contributed a truck valued at $6,000.
c. Net income from August 1, 2003, through December 31, 2003, was $26,700, which included$66,700 of revenues and $40,000 of expenses.
Given this information:
1. Prepare the journal entries (including closing entries) for the transactions.
2. Prepare a statement of partners capital for the 5 months ending December 31, 2003, for the Emerson and Jacobs partnership.