The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: Lambert and Cost
ADJUSTED TRIAL BALANCE
December 31, 20Y3
ACCOUNT TITLE DEBIT CREDIT
1 Cash 33,600.00
2 Accounts Receivable 47,500.00
3 Supplies 2,200.00
4 Land 119,500.00
5 Building 157,200.00
6 Accumulated Depreciation-Building 67,400.00
7 Office Equipment 63,800.00
8 Accumulated Depreciation-Office Equipment 21,700.00
9 Accounts Payable 27,500.00
10 Salaries Payable 5,100.00
11 Tyler Lambert, Capital 135,400.00
12 Tyler Lambert, Drawing 49,500.00
13 Jayla Yost, Capital 88,100.00
14 Jayla Yost, Drawing 59,900.00
15 Professional Fees 394,500.00
16 Salary Expense 155,000.00
17 Depreciation Expense-Building 15,600.00
18 Property Tax Expense 12,300.00
19 Heating and Lighting Expense 8,400.00
20 Supplies Expense 5,800.00
21 Depreciation Expense-Office Equipment 5,300.00
22 Miscellaneous Expense 4,100.00
23 Totals 739,700.00 739,700.00
The balance in Yost’s capital account includes an additional investment of $10,200 made on April 10, 2016.
Required:
1. Prepare an income statement for 2016. Create a separate statement indicating the division of net income to the partners. The partnership agreement provides for salary allowances of $45,100 to Lambert and $54,500 to Yost, 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 partnership equity for 2016.
3. Prepare a balance sheet as of the end of 2016.