=+PR 12-2A Dividing partnership income obj. 3

✔ 1.

f. Drury net income, $92,900 The ledger of Amid Moshref and Alex Weekley, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 2010:

Debit Credit Balances Balances Cash 24,200 Accounts Receivable 41,300 Supplies 6,700 Land 120,000 Building 160,000 Accumulated Depreciation—Building 52,300 Office Equipment 53,000 Accumulated Depreciation—Office Equipment 21,300 Accounts Payable 3,400 Salaries Payable 5,200 Amid Moshref, Capital 125,000 Amid Moshref, Drawing 50,000 Alex Weekley, Capital 160,000 Alex Weekley, Drawing 60,000 Professional Fees 562,200 Salary Expense 312,300 Depreciation Expense—Building 75,000 Property Tax Expense 3,500 Heating and Lighting Expense 11,200 Supplies Expense 3,400 Depreciation Expense—Office Equipment 6,700 Miscellaneous Expense 2,100 _______ _______ 929,400 929,400 _______ _______ _______ _______ The balance in Weekley’s capital account includes an additional investment of

$20,000 made on April 5, 2010.

Instructions 1. Prepare an income statement for the current fiscal year, indicating the division of net income. The articles of partnership provide for salary allowances of $60,000 to Moshref and $75,000 to Weekley, allowances of 12% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.