The capital accounts of Angel Alvarez and Emma Allison have balances of $46,850 and $72,000, respectively, on January 1, 20Y4, the beginning of the fiscal
The capital accounts of Angel Alvarez and Emma Allison have balances of $46,850 and $72,000, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Alvarez invested an additional $8,360. During the year, Alvarez and Allison withdrew $32,230 and $40,410, respectively, and net income for the year was $62,000. Revenues were $483,000, and expenses were $421,000. The articles of partnership make no reference to the division of net income.
| Required: |
A. | Journalize the entries to close (1) the revenues and expenses and (2) the drawing accounts on December 31. Refer to the Chart of Accounts for exact wording of account titles. |
B. | Prepare a statement of partnership equity for the current year for the partnership of Alvarez and Allison. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. CHART OF ACCOUNTS | Alvarez and Allison | General Ledger | | ASSETS | 110 | Cash | 111 | Petty Cash | 112 | Accounts Receivable | 113 | Allowance for Doubtful Accounts | 114 | Interest Receivable | 115 | Notes Receivable | 116 | Inventory | 117 | Office Supplies | 118 | Store Supplies | 119 | Prepaid Insurance | 120 | Land | 123 | Equipment | 124 | Accumulated Depreciation-Equipment | 129 | Asset Revaluations | 133 | Patent | | LIABILITIES | 210 | Accounts Payable | 211 | Salaries Payable | 213 | Sales Tax Payable | 214 | Interest Payable | 215 | Notes Payable | | EQUITY | 310 | Angel Alvarez, Capital | 311 | Angel Alvarez, Drawing | 312 | Emma Allison, Capital | 313 | Emma Allison, Drawing | | | REVENUE | 410 | Revenues | 610 | Interest Revenue | | EXPENSES | 510 | Cost of Merchandise Sold | 520 | Expenses | 521 | Advertising Expense | 522 | Depreciation Expense-Equipment | 523 | Delivery Expense | 524 | Repairs Expense | 529 | Selling Expenses | 531 | Rent Expense | 533 | Insurance Expense | 534 | Office Supplies Expense | 535 | Store Supplies Expense | 536 | Credit Card Expense | 537 | Cash Short and Over | 538 | Bad Debt Expense | 539 | Miscellaneous Expense | 710 | Interest Expense | | Amount Descriptions | | Add partner withdrawals | | Balance, December 31, 20Y4 | | Balance, January 1, 20Y4 | | Balances after realization | | Balances before realization | | Additional investment during the year | | Withdrawals during the year | | Net income for the year | | Net loss for the year | | Payment of liabilities | | Receipt of deficiency | | Sale of assets and division of gain | | Sale of assets and division of loss | | A. Journalize the entries to close (1) the revenues and expenses and (2) the drawing accounts on December 31. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | 1 | | Closing Entries | | | | | | | 2 | | | | | | | | | 3 | | | | | | | | | 4 | | | | | | | | | 5 | | | | | | | | | 6 | | | | | | | | | 7 | | | | | | | | | 8 | | | | | | | | | 9 | B. Prepare a statement of partnership equity for the current year for the partnership of Alvarez and Allison. Refer to the information given and the list of Amount Descriptions provided for the exact wording of the answer choices for text entries. If there is a decrease in partners equity, enter that amount as a negative number using a minus sign. ALVAREZ AND ALLISON | Statement of Partnership Equity | For the Year Ended December 31, 20Y4 | 1 | | Angel Alvarez, Capital | Emma Allison, Capital | Total Partnership Capital | 2 | | | | | 3 | | | | | 4 | | | | | 5 | | | | | 6 | | | | | | | | | | | | | |