The partnership of Rummel and Kang, Stonecutters, showed revenues of $133,000 and expenses of $41,000 on the year-end work sheet. The capital balances as of January 1, 20–, were $41,000 for C. Rummel and $25,000 for V. Kang. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $43,000 for Rummel and $34,000 for Kang, the partners each withdrew 10% interest on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 60-40 basis.
REQUIRED
1. Prepare the lower portion of the income statement of the partnership for the year ended December 31, 20–, showing the division of the partnership net income for the year.
2. Prepare a statement of partners’ equity for the year ended December 31, 20–, and the partners’ equity section of the balance sheet on that date.
3. Prepare closing entries for the partnership as of December 31, 20–. (For simplicity, use the account titles ?oRevenues?? for all revenues and ?oExpenses?? for all expenses.)
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