Omar Mendez and Rafael cuadrado decide to form a society that started operating the 2 of January of 2025. Mendez invests $8,800 in cash and an account receivable worth $22,000 minus allowance for doubtful accounts of $2,200. Cuadrado adds $16,500 in cash and equipment with a book value of $6,600 and a just value of $11,000 in the market. Both agreed to invest 50% of the societys capital.

The partnership agreement specified that Mendez will have a salary of $20,000 and cuadrado $25,000. Each one will also have an interest income of %10 of the initial balance of capital and the resting gains will be divided in equal parts.

By December 31 2025 there was these balances in the general ledger;

service revenue $135,200

Total expenses $43,200

O Mndez drawings $5,500

R cuadrado drawings $3,300

O Mendez additional investment $15,000

R cuadrado additional investment $6,000

Total liabilities $25,000

INSTRUCTIONS

MAKE A JOURNAL TO RECOGNIZE THE INITIAL INVESTMENT OF BOTH

INCOME STATEMENT

Owners equity statement

Liabilities and owners equity balance sheet

Closing entries by 31 December of 2025