PP-26A 23 IAccount for partner investments, allocating profits and losses to the partners, preparing partnership financial statements [20-30 min] Lorena Lally and Allie Raras formed a partnership on March 15. The partners agreed to invest equal amounts of capital. Lally invested her proprietorship's asse and liabilities (credit balances in parentheses). See the table that follows sets Current Market Values Lally's Book Values $10,600 $12,300 Accounts receivable Inventory 47,000 38,000 Prepaid expenses Store equipment Accounts payable 3,600 3,400 41,000 28,000 (24,000) (24,000) On March 15, Raras invested cash in an amount Lally's partnership capital. The partners decided that Lally will earn 70% of partner- ship profits because she will manage the business. Raras agreed to accept 30% of the profits. During the period ended December 31, the partnership earned net income of $74,000. Lally 's drawings were $42,000, and Raras 's drawings totaled $22,000 equal to the current market value of Requirements Journalize the partners' initial investments Prepare the partnership balance sheet immediately after its formation on March 15 Journalize the closing of the Income summary and partner Drawing accounts on December 31 1. 2. 3