Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $82,500 cash from Busby and $167,500 from Beatty. During Year 1, the partnership earned $68,500 in cash revenues and paid $37,300 for cash expenses. Busby withdrew $3,200 cash from the business, and Beatty withdrew $5,000 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business.