Below is an alphabetical listing of the accounts in the general ledger of Clay and Ogletree, LLP, at the partnership's fiscal year end, September 30, 2014. Adjusting entries for the year have been posted and included in these balances.
Accounts payable............................................$ 21,500
Accounts receivable..........................................105,000
Accumulated depreciation-equipment....................12,000
Cash.............................................................13,500
Depreciation expense..........................................12,000
Equipment......................................................60,000
Fees earned...................................................515,000
G. Clay, capital................................................75,000
G. Clay, drawings............................................150,000
Insurance expense.............................................18,500
Interest expense.................................................5,000
M. Ogletree, capital...........................................37,500
M. Ogletree, drawings.......................................100,000
Note payable...................................................22,500
Prepaid insurance................................................3,500
Property tax expense..........................................15,000
Salaries expense..............................................225,000
Unearned revenue.............................................24,000
Additional information:
1. The balance in Clay's capital account includes an additional investment of $10,000 made during the year.
2. $5,000 of the note payable is due within the next year.
3. Clay and Ogletree share profit and loss in the ratio of 3:2, respectively.
Instructions
(a) Prepare an income statement, statement of partners' equity, and balance sheet.
(b) Journalize the closing entries.
Taking It Further
Should the two partners draw equal amounts each year? Both of them work full-time for the partnership.