Les Waruck, Kim Chau, and Leena Manta formed a partnership, WCM Sales, on January 11, 2020, by investing $68,250, $109,200, and $95,550, respectively. The partnership agreement states that profits and losses are to be shared on the basis of a salary allowance of $40,000 for Waruck, $80,000 for Chau, and $40,000 for Manta, with any remainder shared on the ratio of beginning-of-period capital balance. Following is the December 31, 2020, adjusted trial balance, in alphabetical order:

Required Prepare the December 31, 2020, classified balance sheet, showing all appropriate supporting calculations.

Analysis Component: Assuming that the assets of businesses similar to WCM Sales are financed 60% by debt and 40% by equity, does WCM Sales compare favourably or unfavourably to the industry average? What is the relationship between type of financing and risk?

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Balance Account Account Balance Accounts payable. Leena Manta, capital. 95,550 14,000 Leena Manta, withdrawals. Les Waruck, capital. Les Waruck, withdrawals. 46,000 Accounts receivable. 10,000 Accumulated amortization, patent. 6,000 68,250 Accumulated depreciation, fixtures. 3,000 30,000 Accumulated depreciation, furniture. 6,000 Merchandise inventory. 22,000 1,200 Notes payable, due 2023*. Allowance for doubtful accounts. 34,000 Amortization expense, patent 2,000 Patent. 20,000 Bad debt expense 2,800 36,000 Prepaid rent.. Cash. 14,000 Rent expense 84,000 Depreciation expense, fixtures 3,000 Sales. 102,000 Sales discounts. 6,000 3,400 Depreciation expense, furniture 31,000 Fixtures Unearned sales. 3,000 Furniture. Wages expense. 69,000 49,000 Kim Chau, capital 109,200 Kim Chau, withdrawals 14,000