Mike and Rachel form M&R Partnership. Mike invests $60,000 cash and Rachel invests $80,000 cash. The partners agree to share income as follows: Mike gets a salary allowance of $5,000 per year and Rachel gets a salary allowance of $11,000 per year; both get an annual interest allowance of 12% on their initial investment; and any remaining balance is shared equally. Net income for the year is $50,000. Also, Mike withdrew $3,000 cash from the partnership and Rachel withdrew $4,000.

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.