Prepare a statement of partners equity

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Reference no: EM132878255

Problem - 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:

Aiden, Durant, Adkins Trial Balance December 31, 2012

 

Debit Balances

Credit Balances

Cash

42,000


Accounts Receivable

42,300


Supplies

1,500


Land

100,000


Building

108,100


Accumulated Depreciation-Building


62,500

Office Equipment

46,000


Accumulated Depreciation-Office Equipment


19,400

Accounts Payable


29,800

Salaries Payable


3,200

Aiden Durant, Capital


100,000

Aiden Durant, Drawing

45,000


Jasmine Adkins, Capital


60,000

Jasmine Adkins, Drawing

65,000


Professional Fees


364,500

Salary Expense

146,000


Depreciation Expense-Building

14,500


Property Tax Expense

9,000


Heating and Lighting Expense

7,200


Supplies Expense

5,200


Depreciation Expense-Office Equipment

4,500


Miscellaneous Expense

3,100


 

639,400

639,400

The balance in Adkins' capital account includes an additional investment of $10,000 made on August 10, 2012.

Required -

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. Prepare a balance sheet as of the end of 2012.

Reference no: EM132878255

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