December 31, 2017 - The business recorded a net income of $27,000, and Rodgers had a debit balance of $16,000 in his drawings account.

Required:

a. Show the entry to allocate the net income to the partners' capital accounts using the income ratio. (2 marks)

b. Prepare a Statement of Partners' Equity for 2017

January 1, 2018 - Mahomes 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. Rodgers, Brady, and Mahomes agree to salaries of $5,000 for each partner, and a 5:4:3 income ratio.

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

December 31, 2018 - The business recorded a net income of $30,000. Rodgers had drawings of $20,000 and Brady had drawings of $4,000.

Required:

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

b. Prepare a Statement of Partners' Equity for 2018.

January 1, 2019 - Brady decides to leave the partnership. Mahomes agrees to pay Brady $73,000 in a private transaction. The result is that all of Brady's equity will be transferred to Mahomes. The income or loss will now be divided between Rodgers and Mahomes in a 50%, 50% ratio. The partners no longer receive a salary.

Required: Show the entry to record the departure of Brady.

December 31, 2019 - The business recorded a net loss of $46,000. Mahomes had drawings of $20,834.

Required:

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

b. Prepare a Statement of Partners' Equity for 2019.

January 1, 2020 - 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.

Required:

a. Show the entry to sell off the assets.

b. Show the entry to allocate the loss on sale to the partners.

c. Show the entry to pay off the business liabilities.

d. Show the entry to dissolve the partnership, allocating cash to the partners.