Mitch Owen and Casey Fielding formed a partnership, trading as MC Design & Construction, on 1 July 2020, agreeing to share profits and losses in the ratio of 3:2 respectively. The partners' capital account balances are to remain fixed.

TASK 2 (36 marks) Mitch Owen and Casey Fielding formed a partnership, trading as MC Design & Construction, on 1 July 2020, agreeing to share profits and losses in the ratio of 3:2 respectively. The partners' capital account balances are to remain fixed. Interest on capital and drawings is applied at the rate of 6% pa. Mitch contributed $60 000 in cash and buildings with a fair value of $180 000. Assets contributed to and liabilities assumed by the partnership from Casey's business at both carrying amount and fair value are shown below. Carrying Amount Fair Value Cash at Bank 38,750 38,750 Accounts Receivable 24,250 24,250 Inventory 34,200 32,800 Machinery 98,000 92,000 Accounts Payable 10,500 10,500 Bank Loan 25,000 25,000 During the first year of operations, Casey contributed an additional $18 000 in cash. The residual partnership profit after interest and drawings was $86 000. Mitch withdrew $8 000 and Casey withdrew $16 000 in expectation of profits (ignore GST). Required (a) Prepare the journal entries to record each partner's initial investment. (10 marks) (b) Prepare the partnership's balance sheet as at 1 July 2020. (10 marks) (c) Prepare a statement of changes in partners' equity for the year ended 30 June 2021. (16 marks)TASK 2 (a) (10 marks) GENERAL JOURNAL MC DESIGN & CONSTRUCTION Date Particulars DR CR TASK 2 (b) Prepare the partnership's balance sheet as at 1 July 2020. (10 marks) MC DESIGN & CONSTRUCTION Balance Sheet as at 1 July 2020 +TASK 2 (c) Prepare a statement of changes in partners' equity for the year ended 30 June 2021 (16 marks) MC DESIGN & CONSTRUCTION Statement of Changes in Partners' Equity for the year ended 30 June 2021 Owen Fielding Total