Wendy, William and Wanda are independent website developers who have been trading in active opposition to one another for some years. They decide to form a partnership, WWW Web Developers, as from 1 January 2019. The agreement set out the following basic arrangements.

1. Wendy is to contribute $8000 in cash, computers valued at $10 000, and debtors of $12 000 

2. William is to contribute a lease of premises used by him, such a lease to be regarded as having a capital value of $12 500, computers of $10 000 and $6000 in cash.

3. Wanda is to contribute computers valued at $13 750 and to act as managing partner at a salary of $20 000 per year.

4. Interest for the period is to be allowed partners at the rate of 8% p.a. on beginning capital but is not charged on drawings.

5. Profits or losses are to be shared in the same proportions as capital contributed.

Required

(a) Prepare the journal entries necessary to open the records of the partnership. (Ignore GST.)

(b) Assuming in the first year that the partnership makes a profit of $65 000, show how this profit would be allocated to partners.