Financial Statements for Partnerships

The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y2:

Ramirez and Xue Trial Balance December 31, 20Y2
	Debit Balances		Credit Balances
Cash	70,300
Accounts Receivable	33,600
Supplies	5,800
Land	128,000
Building	175,000
Accumulated DepreciationBuilding			80,000
Office Equipment	42,000
Accumulated DepreciationOffice Equipment			25,300
Accounts Payable			12,400
Salaries Payable			10,000
Camila Ramirez, Capital			125,000
Camila Ramirez, Drawing	35,000
Ping Xue, Capital			155,000
Ping Xue, Drawing	50,000
Professional Fees			555,300
Salary Expense	384,900
Depreciation ExpenseBuilding	12,900
Heating and Lighting Expense	10,500
Depreciation ExpenseOffice Equipment	6,300
Property Tax Expense	3,200
Supplies Expense	3,000
Miscellaneous Expense	2,500
	963,000		963,000

The balance in Xue's capital account includes an additional investment of $20,000 made on May 5, 20Y2.

Required:

1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $50,000 to Ramirez and $65,000 to Xue, allowances of 12% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.

Ramirez and Xue Income Statement For the Year Ended December 31, 20Y2
Operating expenses:
Total operating expenses
		$

Ramirez and Xue Division of Income For the Year Ended December 31, 20Y2
	Camila Ramirez	Ping Xue	Total
Division of net income:
Salary allowance
Interest allowance
Remaining income (loss)
Net income	$	$	$

2. Prepare a statement of partnership equity for 20Y2. If any amounts are zero, enter in "0".

Ramirez and Xue Statement of Partnership Equity For the Year Ended December 31, 20Y2
	Camila Ramirez	Ping Xue	Total
Balances, January 1, 20Y2
Capital additions
Net income for the year
Partner withdrawals
Balances, December 31, 20Y2	$	$	$

3. Prepare a balance sheet as of the end of 20Y2.

Ramirez and Xue Balance Sheet December 31, 20Y2
Assets
Current assets:
Total current assets			$
Property, plant, and equipment:
	$
Total property, plant, and equip.
Total assets			$
Liabilities
Current liabilities:
		$
Total liabilities			$
Partners' Equity
		$
Total partners' equity
Total liabilities and partners' equity			$