2014 January 1 - Brady and Manning decide to start up a partnership. Brady brings in $10 000 cash and equipment with a fair market value of $37 000. Manning brings $60 000 in cash, but he is also bringing $6 000 in accounts payable from his old business. They agree to an income ratio of 5:4.

Show the entry to establish the partnership.

December 31 - the business recorded a net income of $24 000, and Brady had a debit balance of $16 000 in his drawings account.

Show the entry to allocate the net income to the partners' capital accounts using the income ratio.

Prepare a Statement of Partners' Equity for 2014.

2015 January 1 - McNabb joins the partnership. He is anxious to join and agrees to pay $46 000 for a 20% share of the business, with the bonus to the existing partners. Brady, Manning and McNabb agree to salaries of $5 000 for each partner, and a 5:4:3 income ratio.

Show the entry to admit the new partner into the business.

December 31 - the business recorded a net income of $30 000. Brady had drawings of $20 000 and Manning had drawings of $4 000.

Show the entry to allocate the net income to the partners' capital accounts. Prepare a Statement of Partners' Equity for 2015.

2016 January 1 - Manning decides to leave the partnership. McNabb agrees to pay Manning $73 000 in a private transaction. The result is that all of Manning's equity will be transferred to McNabb. The income or loss will now be divided between Brady and McNabb in a 50%, 50% ratio. The partners no longer receive a salary.

Show the entry to record the departure of Manning.

December 31 - the business recorded a net loss of $46 000. McNabb had drawings of $20 834.

Show the entry to allocate the net loss to the partners' capital accounts.

Prepare a Statement of Partners' Equity for 2016.

2017 January 1 The partners decide to liquidate the partnership. They have the following balances: Cash $12 000 Accounts Receivable $8 166 Equipment $ 110 000 Accumulated Depreciation $ 25 000 Accounts Payable $ 11 000 The partners were able to collect $3 500 of the accounts receivable and sell the equipment for $52 000.