Jeffrey Lowe and Mona Ray are partners in a business. Statement paper, page 12 of a general journal, and a portion of the partnership's completed work sheet for the year ended December 31 of the current year are provided in the Working Papers. Work independently to complete the following problem.

1. Prepare an income statement. Calculate and record the component percentages for total operating expenses and net income. Round percentage calculations to the nearest 0.1%.

2. Prepare a distribution of net income statement. Each partner is to receive 8% interest on January 1 equity. Also, partners’ salaries are Jeffrey, \($12,000.00\) and Mona, \($16,000.00\) The remaining net income, net loss, or deficit is shared equally.

3. Prepare an owners’ equity statement.

4. Journalize the closing entries.