After closing the revenue and expense accounts, the profit for the year ended December 31, 2021 of the Mo & Molly partnership is $129,000. The partnership agreement specifies that profits and losses will be shared using the following formula.

1.		Allocate salary allowances of $24,000 to Mo and $42,000 to Molly.
2.		Remaining profit (loss) is to be shared on a ratio of 2:1.

At the beginning of the year, Mos capital account had a balance of $40,000 and Mollys capital account had a balance of $24,000. Mo withdrew $1,800 cash per month while Molly withdrew $3,600 per month from the partnership. Prepare a schedule to show how the profit will be allocated to the two partners.

MO & MOLLY Division of Profit Year Ended December 31, 2021
		Mo			Molly			Total
Profit		$			$			$
Salary allowance
Mo
Molly
Total
Profit remaining for allocation
Fixed ratio
Mo
Molly
Total
Profit remaining for allocation
Profit allocated to the partners		$			$			$

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Prepare a statement of partners equity for the year. (List items that increase partner's equity first.)

MO & MOLLY Statement of Partners Equity Year Ended December 31, 2021
		Mo		Molly		Total
Profit / (Loss)Capital, January 1InvestmentsTotal RevenuesExpensesCapital, December 31RevenuesDrawingsGross Profit / (Loss)Total Expenses		$		$		$
AddLess:
RevenuesCapital, January 1DrawingsInvestmentsProfit / (Loss)ExpensesTotal ExpensesGross Profit / (Loss)Capital, December 31Total Revenues
RevenuesDrawingsCapital, January 1InvestmentsCapital, December 31Total RevenuesProfit / (Loss)Gross Profit / (Loss)ExpensesTotal Expenses
AddLess: Capital, December 31Total ExpensesRevenuesGross Profit / (Loss)Profit / (Loss)Capital, January 1DrawingsExpensesInvestmentsTotal Revenues
InvestmentsProfit / (Loss)Capital, January 1Total RevenuesRevenuesDrawingsGross Profit / (Loss)Total ExpensesCapital, December 31Expenses		$		$		$

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