Financial Statements for Partnership
The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y2:
| Ramirez and Xue | |||
| Trial Balance | |||
| December 31, 20Y2 | |||
| Debit Balances | Credit Balances | ||
| Cash | 46,200 | ||
| Accounts Receivable | 44,000 | ||
| Supplies | 1,700 | ||
| Land | 110,000 | ||
| Building | 121,400 | ||
| Accumulated Depreciation—Building | 68,800 | ||
| Office Equipment | 50,600 | ||
| Accumulated Depreciation—Office Equipment | 21,300 | ||
| Accounts Payable | 32,800 | ||
| Salaries Payable | 3,500 | ||
| Camila Ramirez, Capital | 110,000 | ||
| Camila Ramirez, Drawing | 49,500 | ||
| Ping Xue, Capital | 66,000 | ||
| Ping Xue, Drawing | 71,500 | ||
| Professional Fees | 400,900 | ||
| Salary Expense | 160,600 | ||
| Depreciation Expense—Building | 15,900 | ||
| Heating and Lighting Expense | 7,900 | ||
| Depreciation Expense—Office Equipment | 5,000 | ||
| Property Tax Expense | 9,900 | ||
| Supplies Expense | 5,700 | ||
| Miscellaneous Expense | 3,400 | ||
| 703,300 | 703,300 |
The balance in Xue’s capital account includes an additional investment of $11,000 made on May 5, 20Y2.
Required:
1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $44,000 to Ramirez and $54,000 to Xue, 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.
| Ramirez and Xue Income Statement For the Year Ended December 31, 20Y2 |
||
|---|---|---|
| Professional Fees | $fill in the blank 2 | |
| Operating expenses: | ||
| Salary Expense | $fill in the blank 4 | |
| Depreciation Expense-Building | fill in the blank 6 | |
| Heating and Lighting Expense | fill in the blank 8 | |
| Depreciation Expense-Office Equipment | fill in the blank 10 | |
| Property Tax Expense | fill in the blank 12 | |
| Supplies Expense | fill in the blank 14 | |
| Miscellaneous Expense | fill in the blank 16 | |
| Total operating expenses | fill in the blank 17 | |
| Net Income | $fill in the blank 19 |
| Ramirez and Xue Division of Income For the Year Ended December 31, 20Y2 |
|||
|---|---|---|---|
| Camila Ramirez | Ping Xue | Total | |
| Division of net income: | |||
| Salary allowance | $fill in the blank 20 | $fill in the blank 21 | $fill in the blank 22 |
| Interest allowance | fill in the blank 23 | fill in the blank 24 | fill in the blank 25 |
| Remaining income | fill in the blank 26 | fill in the blank 27 | fill in the blank 28 |
| Net income | $fill in the blank 29 | $fill in the blank 30 | $fill in the blank 31 |
2. Prepare a statement of partnership equity for 20Y2. If any amounts are zero, enter in “0”.
| Ramirez and Xue Statement of Partnership Equity For the Year Ended December 31, 20Y2 |
|||
|---|---|---|---|
| Camila Ramirez | Ping Xue | Total | |
| Balances, January 1, 20Y2 | $fill in the blank 32 | $fill in the blank 33 | $fill in the blank 34 |
| Capital additions | fill in the blank 35 | fill in the blank 36 | fill in the blank 37 |
| Net income for the year | fill in the blank 38 | fill in the blank 39 | fill in the blank 40 |
| Partner withdrawals | fill in the blank 41 | fill in the blank 42 | fill in the blank 43 |
| Balances, December 31, 20Y2 | $fill in the blank 44 | $fill in the blank 45 | $fill in the blank 46 |
3. Prepare a balance sheet as of the end of 20Y2.
| Ramirez and Xue Balance Sheet December 31, 20Y2 |
|||
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| $fill in the blank 48 | |||
| fill in the blank 50 | |||
| fill in the blank 52 | |||
| Total current assets | $fill in the blank 53 | ||
| Property, plant, and equipment: | |||
| $fill in the blank 55 | |||
| $fill in the blank 57 | |||
| fill in the blank 59 | fill in the blank 60 | ||
| $fill in the blank 62 | |||
| fill in the blank 64 | fill in the blank 65 | ||
| Total property, plant, and equip. | fill in the blank 66 | ||
| Total assets | $fill in the blank 67 | ||
| Liabilities | |||
| Current liabilities: | |||
| $fill in the blank 69 | |||
| fill in the blank 71 | |||
| Total liabilities | fill in the blank 72 | ||
| Partners’ Equity | |||
| $fill in the blank 74 | |||
| fill in the blank 76 | |||
| Total partners’ equity | fill in the blank 77 | ||
| Total liabilities and partners’ equity | $fill in the blank 78 |
Financial Statements for Partnership
The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y2:
| Ramirez and Xue | |||
| Trial Balance | |||
| December 31, 20Y2 | |||
| Debit Balances | Credit Balances | ||
| Cash | 50,400 | ||
| Accounts Receivable | 48,000 | ||
| Supplies | 1,800 | ||
| Land | 120,000 | ||
| Building | 132,000 | ||
| Accumulated Depreciation—Building | 75,000 | ||
| Office Equipment | 55,200 | ||
| Accumulated Depreciation—Office Equipment | 23,300 | ||
| Accounts Payable | 35,800 | ||
| Salaries Payable | 3,800 | ||
| Camila Ramirez, Capital | 120,000 | ||
| Camila Ramirez, Drawing | 54,000 | ||
| Ping Xue, Capital | 72,000 | ||
| Ping Xue, Drawing | 78,000 | ||
| Professional Fees | 436,800 | ||
| Salary Expense | 175,200 | ||
| Depreciation Expense—Building | 17,400 | ||
| Heating and Lighting Expense | 8,600 | ||
| Depreciation Expense—Office Equipment | 5,400 | ||
| Property Tax Expense | 10,800 | ||
| Supplies Expense | 6,200 | ||
| Miscellaneous Expense | 3,700 | ||
| 766,700 | 766,700 |
The balance in Xue’s capital account includes an additional investment of $12,000 made on May 5, 20Y2.
Required:
1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $48,000 to Ramirez and $59,000 to Xue, 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.
| Ramirez and Xue Income Statement For the Year Ended December 31, 20Y2 |
||
|---|---|---|
| $fill in the blank 2 | ||
| Operating expenses: | ||
| $fill in the blank 4 | ||
| fill in the blank 6 | ||
| fill in the blank 8 | ||
| fill in the blank 10 | ||
| fill in the blank 12 | ||
| fill in the blank 14 | ||
| fill in the blank 16 | ||
| Total operating expenses | fill in the blank 17 | |
| $fill in the blank 19 |
| Ramirez and Xue Division of Income For the Year Ended December 31, 20Y2 |
|||
|---|---|---|---|
| Camila Ramirez | Ping Xue | Total | |
| Division of net income: | |||
| Salary allowance | $fill in the blank 20 | $fill in the blank 21 | $fill in the blank 22 |
| Interest allowance | fill in the blank 23 | fill in the blank 24 | fill in the blank 25 |
| Remaining income | fill in the blank 26 | fill in the blank 27 | fill in the blank 28 |
| Net income | $fill in the blank 29 | $fill in the blank 30 | $fill in the blank 31 |
2. Prepare a statement of partnership equity for 20Y2. If any amounts are zero, enter in “0”.
| Ramirez and Xue Statement of Partnership Equity For the Year Ended December 31, 20Y2 |
|||
|---|---|---|---|
| Camila Ramirez | Ping Xue | Total | |
| Balances, January 1, 20Y2 | $fill in the blank 32 | $fill in the blank 33 | $fill in the blank 34 |
| Capital additions | fill in the blank 35 | fill in the blank 36 | fill in the blank 37 |
| Net income for the year | fill in the blank 38 | fill in the blank 39 | fill in the blank 40 |
| Partner withdrawals | fill in the blank 41 | fill in the blank 42 | fill in the blank 43 |
| Balances, December 31, 20Y2 | $fill in the blank 44 | $fill in the blank 45 | $fill in the blank 46 |
3. Prepare a balance sheet as of the end of 20Y2.
| Ramirez and Xue Balance Sheet December 31, 20Y2 |
|||
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| $fill in the blank 48 | |||
| fill in the blank 50 | |||
| fill in the blank 52 | |||
| Total current assets | $fill in the blank 53 | ||
| Property, plant, and equipment: | |||
| $fill in the blank 55 | |||
| $fill in the blank 57 | |||
| fill in the blank 59 | fill in the blank 60 | ||
| $fill in the blank 62 | |||
| fill in the blank 64 | fill in the blank 65 | ||
| Total property, plant, and equip. | fill in the blank 66 | ||
| Total assets | $fill in the blank 67 | ||
| Liabilities | |||
| Current liabilities: | |||
| $fill in the blank 69 | |||
| fill in the blank 71 | |||
| Total liabilities | fill in the blank 72 | ||
| Partners’ Equity | |||
| $fill in the blank 74 | |||
| fill in the blank 76 | |||
| Total partners’ equity | fill in the blank 77 | ||
| Total liabilities and partners’ equity | $fill in the blank 78 |
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