Obj. 2 - Describe and illustrate the accounting for forming a partnership and for dividing the net income and net loss of a partnership., 5 - Prepare the statement of partnership equity. 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

The balance in Xue's capital account includes an additional investment of $20,000 made on May 5, 20Y2. Instructions 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. 2. Prepare a statement of partnership equity for 20Y2. 3. Prepare a balance sheet as of the end of 20Y2.