The adjusted trial balance of the Kelton and Watts Partnership for the year ended December 31, 2015, appears below:

KELTON AND WATTS PARTNERSHIP

Adjusted Trial Balance

For the Year Ended December 31, 2016

Current Assets......................................................................................... 29,000

Fixed Assets............................................................................................ 80,000

Current Liabilities.................................................................................... 7,000

Long-term Debt....................................................................................... 50,000

Kelton, Capital......................................................................................... 20,000

Kelton, Drawing...................................................................................... 4,000

Watts, Capital.......................................................................................... 18,000

Watts, Drawing........................................................................................ 7,000

Sales......................................................................................................... 100,000

Cost of Goods Sold................................................................................. 52,000

Operating Expenses................................................................................. 23,000

The partnership agreement stipulates that a division of partnership net income or net loss is to be made as follows:

1. A salary allowance of $1,000 to Kelton and $5,000 to Watts.

2. The remainder is to be divided equally.

Instructions

Prepare the Income Statement

Prepare a schedule which shows the division of net income to each partner

Prepare the Statement of Partnership Capital at December 31, 2016.