The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 2014:

The balance in Xue's capital account includes an additional investment of $20,000 made on May 5, 2014.
Instructions
1. Prepare an income statement for the current fiscal year, indicating the division of net income. The partnership agreement provides for salary allowances of $50,000 to Ramirez and $65,000 to Xue, allowances of 12% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.
2. Prepare a statement of partnership equity for 2014.
3. Prepare a balance sheet as of the end of 2014.

Transcribed Image Text:

Ramirez and Xue Trial Balance December 31, 2014 Credit Balances Accounts Receivable Accumulated Depreciation Building Accumulated Depreciation-Office Equipment Camila Ramirez, Drawing Heating and Lighting Expense Depreciation ExpenseOtfice Equipment 10,500 963,000