Exercise 12-8 (Algo) Preparing a statement of partner's equity LO P2 Mike and Rachel form M&R Partnership. Mike invests $53,000 cash and Rachel invests $73,000 cash. The partners agree to share income as follows: Mike gets a salary allowance of $5,100 per year and Rachel gets a salary allowance of $10,300 per year; both get an annual interest allowance of 10% on their initial investment; and any remaining balance is shared equally. Net income for the year is $43,000. Also, Mike withdrew $2,300 cash from the partnership and Rachel withdrew $3,300. Prepare a statement of partners' equity for the year ended December 31. Note: Do not round intermediate calculations. Enter all allowances as positive values. Enter losses and withdrawals as negative values. M&R PARTNERSHIP Statement of Partners' Equity For Year Ended December 31 Initial partnership investments Net income Salary allowances Interest allowances Balance allocated Total net income Total Less partners' withdrawals Ending capital balances $ Mike 53,000 5,100 5,100 58,100 (2,300) 55,800 $ Rachel 73,000 10,300 10,300 83,300 (3,300) 80,000 Total 126,000 15,400 141,400 (5,600) $ 135,800

Need to know how to get the intrest allowances & balance allocated.

Exercise 12-8 (Algo) Preparing a statement of partner's equity LO P2 Mike and Rachel form M\&R Partnership. Mike invests $53,000 cash and Rachel invests $73,000 cash. The partners agree to share income as follows: Mike gets a salary allowance of $5,100 per year and Rachel gets a salary allowance of $10,300 per year; both get an annual interest allowance of 10% on their initial investment; and any remaining balance is shared equally. Net income for the year is $43,000. Also, Mike withdrew $2,300 cash from the partnership and Rachel withdrew $3,300. Prepare a statement of partners' equity for the year ended December 31 . Note: Do not round intermediate calculations. Enter all allowances as positive values. Enter losses and withdrawals as negative values