You and one friend have decided to form a partnership. You will complete the following the first week:

$1.$ Decide what type of business you are going to conduct$=$ Accounting Firm

$2.$ Decide on a name for your partnership$=$ AM Accounting Firm

$3.$ Decide what $($cash$,$ equipment etc.$)$ and how much each partner will contribute as an opening investment$=50\%$ equal

$4.$ Decide how income$/$losses will be allocated

$5.$ Make the required journal entries to record the initial investment of each partner $($use the date

$1/1/21.$

Complete the file titled $$Project Part One$$

It is now $12/31/21$ and your partnership has the following revenue$/$expenses for the year:

Revenue $-$ $$625,000$

Expenses $-$ $$595,000$

Prepare the closing entries for your partnership. Remember, you must allocate the net income in the

way in which you decided in your previous assignment.

Assuming no additional investments during the year prepare the Statement of Partnership Equity.

Complete the files titled $$Project Part Two and Statement of Partnership Equity$$

It is now $12/31/2025$ and you have decided to liquidate your partnership. After closing the books for

$2025$ your partnership has the following account balances:

Account Title Debit Credit

Cash $4000$

Inventory $40000$

Other Assets $150,000$

Liabilities $44,000$

Partner One Capital $($You$)75,000$

Partner Two Capital $($Your

Friend$)75,000$

The noncash assets are sold for $$211,000$

Use the file titled Project Part Three to complete the journal entries necessary to record the partnership

liquidation: