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Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $76,000 cash from Busby and $124,000 from Beatty.

Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $76,000 cash from Busby and $124,000 from Beatty. During Year 1, the partnership earned $66,600 in cash revenues and paid $34,650 for cash expenses. Busby withdrew $3,200 cash from the business, and Beatty withdrew $4,000 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.

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Prepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for B&Bs Year 1 fiscal year.

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