PROBLEMI On May 1 of the current year, Anna Austin and Dave Walls form a partnership. Austin agrees to invest $10,500 in cash and merchandise inventory valued at $39,500. Walls invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring his total capital to $40,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wall's Ledger Agreed Balance Valuation Accounts Receivable $20,750 $19,500 Allowance for Doubtful Accounts 950 800 Equipment 79,100) 45,000 Accumulated Depreciation 35,200) Accounts Payable 14,000 14,000 Notes Payable 15,000 15,000 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $18,000 and $21,000 respectively, and the remainder equally. Instructions 1. Journalize the entries to record the investment of Austin and Walls in the partnership accounts. 2. Prepare the balance sheet as of May 1, the date of formation of the partnership of Austin and Walls. 3. After adjustments and the closing of revenue and expense accounts at April 30. the end of the first full year of operations, the income summary account has a credit balance of $68,000, and the drawing accounts have debit balances of $20,000 (Austin) and $26,000 (Walls). Journalize the entries to close the summary account and the drawing accounts at April 30