1. Record the formation of the partnership.
2. Record the drawings of the partners.
3. Allocate partnership profit for the year. Show all calculations.
4. Record the allocation of profit to the partners capital accounts.
5. On January 1, 2015, Heather sold 25% of her share of the partnership to Danielle for $50,000. Prepare the journal entry to record the transaction. Round your answer to the nearest dollar amount.

QUESTION 1 (12 Marks On January 1, 2014, Rob and Heather formed a partnership. Rob invested $25,000 in cash and equipment valued at $100,000. Heather invested $40,000 in cash and a truck valued at $60,000. During the year, Rob and Heather withdrew $24,000 and $18,000, respectively. The partnership agreement provides an annual salary allowance of $20,000 for Rob and $30,000 for Heather. The partners also receive an interest allowance on the beginning-of-the-year capital balances (2% for Rob, 4% for Heather). Any remaining profit will be shared in the ratio of 3:1, respectively, between Rob and Heather. Partnership profit for 2014 was $140,000