Tom and Julie formed a management consulting partnership on January 1, 2016. The fair value of the net assets invested by each partner follows:

TomJulieCash$12,500$12,300Accounts receivable8,8005,900Office supplies1,900800Office equipment27,200Land28,300Accounts payable1,8005,100Mortgage payable17,000

During the year, Tom withdrew $14,900 and Julie withdrew $13,000 in anticipation of operating profits. Net profit for 2016 was $48,700, which is to be allocated based on the original net capital investment.

(a)

1.Record the initial investment in the partnership.2.Record the withdrawals3.Close the Income Summary and Drawing accounts.

THIS QUESTION HAS PART B.

Prepare a statement of changes in partners' capital for the year ended December 31, 2016