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Financial statements for partnerships 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 70,300 Accounts Receivable 33,600 Supplies 5,800 Land 128,000 Building 175,000 Accumulated Depreciation—Building 80,000 Office Equipment 42,000 Accumulated Depreciation—Office Equipment 25,300 Accounts Payable 12,400 Salaries Payable 10,000 Camila Ramirez, Capital 125,000 Camila Ramirez, Drawing 35,000 Ping Xue, Capital 155,000 Ping Xue, Drawing 50,000 Professional Fees 555,300 Salary Expense 384,900 Depreciation Expense—Building 12,900 Heating and Lighting Expense 10,500 Depreciation Expense—Office Equipment 6,300 Property Tax Expense 3,200 Supplies Expense 3,000 Miscellaneous Expense 2,500 963,000 963,000 The balance in Xue's capital account includes an additional investment of $20,000 made on May 5. 20Y2. Instructions 1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $50,000 to Ramirez and $65,000 to Xue, allowances of 12% 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 partnership equity for 20Y2. 3. Prepare a balance sheet as of the end of 20Y2.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 12, Problem 12.3BPR
Textbook Problem

Financial statements for partnerships

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 70,300  
Accounts Receivable 33,600  
Supplies 5,800  
Land 128,000  
Building 175,000  
Accumulated Depreciation—Building 80,000
Office Equipment 42,000  
Accumulated Depreciation—Office Equipment 25,300
Accounts Payable 12,400
Salaries Payable 10,000
Camila Ramirez, Capital 125,000
Camila Ramirez, Drawing 35,000  
Ping Xue, Capital 155,000
Ping Xue, Drawing 50,000  
Professional Fees 555,300
Salary Expense 384,900  
Depreciation Expense—Building 12,900  
Heating and Lighting Expense 10,500  
Depreciation Expense—Office Equipment 6,300  
Property Tax Expense 3,200  
Supplies Expense 3,000  
Miscellaneous Expense 2,500  
  963,000 963,000

The balance in Xue's capital account includes an additional investment of $20,000 made on May 5. 20Y2.

Instructions

  1. 1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $50,000 to Ramirez and $65,000 to Xue, allowances of 12% 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. 2. Prepare a statement of partnership equity for 20Y2.
  3. 3. Prepare a balance sheet as of the end of 20Y2.

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Chapter 12 Solutions

Accounting
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