Tom and Julie formed a management consulting partnership on January 1, 2024. The fair value of the net assets invested by each partner follows:

During the year, Tom withdrew $15,000 and Julie withdrew $12,000 in anticipation of operating profits. Net profit for 2024 was $50,000, which is to be allocated based on the original net capital investment.

Required:
A. Prepare journal entries to:
1. Record the initial investment in the partnership.
2. Record the withdrawals.
3. Close the Income Summary and Drawing accounts.
B. Prepare a statement of changes in partners’ capital for the year ended December 31, 2024.

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Cash Accounts receivable Office supplies Office equipment Land Accounts payable Mortgage payable Tom $13,000 8,000 2,000 30,000 2,000 - Julie $12,000 6,000 800 30,000 5,000 18,800