The ledger of Camila Ramirez and Ping Xue, attorneys at law, contains the follow

Question

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, 2014.

                                                                       Ramirez and xue Trial Balance December 31,2014

         The balance in Xue's capital account includes an additional investment of $20,000 made on may 5, 2014.

Instructions:

1. prepare an income statement for the current fisca year, including 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 partners capital balance at the begining of the fisca year, and equal division of the remaining net income or net loss.

2. prepare a statement of partnership equity for 2014.

3. prepare a balance sheet of the end of 2014.

Thanks.

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 Ramirex, 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

Explanation / Answer

Ramirez and xue Income Statement For the Year ended December 31, 2014 Professional fees 555300 Less: Expenses Salary Expense 384900 Depreciation Expense - Building 12900 Heating and lighting business 10500 Depreciation Expense - Office equipment 6300 Property Tax expense 3200 Supplies expense 3000 Miscellaneous expense 2500         Total Expense 423300 Net Income 132000 Distribution of Income Camila Ramirex Ping Xue Salary 50000 65000 Interest on capital 15000 16200 Balance - Equally -7100 -7100       Total 57900 74100 Ramirez and xue Statement of Partenership Equity For the Year ended December 31, 2014 Camila Ramirex Ping Xue Balance - Beginning 125000 135000 Add: additional Investment 20000            Share of Profits 57900 74100 182900 229100 Less: Drawings 35000 50000 Balance Ending 147900 179100 Ramirez and xue Balance Sheet As on December 31, 2014 Assets Current Assets Cash 70300 Accounts receivable 33600 Supplies 5800     Total Current Assets 109700 Property, Plant & Equipment Land 128000 Building 175000 Less: Accumulated Dep - Building 80000 95000 Office Equipment 42000 Less: Accumulated Dep - Equipment 25300 16700     Total Assets 349400 Liabilities and Owner's Capital Current Liabilites Accounts Payable 12400 Salaries Payable 10000    Total Current Liabilites 22400 Partner's Capital Camila Ramirex 147900 Ping Xue 179100 327000 Total Liabilities and Owner's Capital 349400

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