Exercise 12-8

Mike and Rachel form M\&R Partnership. Mike invests $43,000 cash and Rachel invests $63,000 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 $9,300 per year, both get an annual interest aliowance of 12% on their initial irvestment; and any remaining balance is shared equally. Net income for the year is $33,000. Also, Mike withdtew \$1,300 cash from the partnership and Rachel withdrew \$2,300. Prepare a statement of partners' equity for the year ended December 31. (Do not round Intermediate calculations. Enter all allowances as posltive values. Enter losses and withdrawais as negative values.)