The partnership of Rummel and Kang, Stonecutters, reported revenues of $133,000 and expenses of $41,000 on the

Question:

The partnership of Rummel and Kang, Stonecutters, reported revenues of $133,000 and expenses of $41,000 on the year-end work sheet. The capital balances as of January 1, 20--, were $41,000 for C. Rummel and $25,000 for V. Kang. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $43,000 for Rummel and $34,000 for Kang, the partners each withdrew their full 10% interest allowances on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 60-40 basis.

REQUIRED

1. Prepare the lower portion of the income statement of the partnership for the year ended December 31, 20--, showing the division of the partnership net income for the year.

2. Prepare a statement of partners' equity for the year ended December 31, 20--, and the partners' equity section of the balance sheet on that date.

3. Prepare closing entries for the partnership as of December 31, 20--. (For simplicity, use the account titles "Revenues" for all revenues and "Expenses" for all expenses.)

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...