For National Co., beginning capital balances on January 1, 2022, are Nancy Payne $20,000 and Ann Dody

Question:

For National Co., beginning capital balances on January 1, 2022, are Nancy Payne $20,000 and Ann Dody $18,000. During the year, drawings were Payne $8,000 and Dody $5,000. Net income was $40,000, and the partners share income equally.

Instructions
a. Prepare the partners’ capital statement for the year.
b. Prepare the owners’ equity section of the balance sheet at December 31, 2022.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...