The following are the adjusted account balances of Abel and Rist as of December 31, the end of this fiscal year.

The merchandise inventory at the beginning of the year was $139,146, and there were no changes in the partners’ Capital accounts during the year. The partner¬
ship agreement provides for salary allowances of $31,200 for Abel and $28,800 for Rist. The agreement also stipulates interest of 12 percent on invested capital at the beginning of the year. The remainder of the net income is to be divided equally.
Instructions 1. Prepare an income statement for the year.
2. Prepare a statement of partners’ equity for the year.
3. Prepare a classified balance sheet at the end of the year Check Figure Rist, Capital, $59,668 Check Figure For $56,000, Plan (c), Jayson, Net Income, $26,810 P.O. 2c,4

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M. B. Abel, Drawing Accounts Payable Accounts Receivable Accumulated Depreciation, Equipment M. B. Abel, Capital Allowance for Doubtful Accounts $ 69,416 58,964 46,820 64,000 29,600 2,148 Cash 3,742 Equipment 79,128 Freight In 26,834 General Expenses (control) 14,212 Interest Expense 2,942 Merchandise Inventory 126,236 Notes Payable 16,000 Prepaid Insurance 690 Purchases 509,846 Purchases Returns and Allowances 25,690 Purchases Discount 4,428 Sales 684,836 Sales Returns and Allowances 35,872 Selling Expenses (control) 35,562 R. C. Rist, Capital R. C. Rist, Drawing 52,000 28,800