Question

The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3:

Lambert and Yost

ADJUSTED TRIAL BALANCE

December 31, 20Y3

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	34,300.00
2	Accounts Receivable	48,300.00
3	Supplies	2,100.00
4	Land	119,900.00
5	Building	157,900.00
6	Accumulated Depreciation-Building		66,800.00
7	Office Equipment	63,700.00
8	Accumulated Depreciation-Office Equipment		21,700.00
9	Accounts Payable		28,400.00
10	Salaries Payable		4,900.00
11	Tyler Lambert, Capital		135,500.00
12	Tyler Lambert, Drawing	50,200.00
13	Jayla Yost, Capital		87,700.00
14	Jayla Yost, Drawing	59,800.00
15	Professional Fees		396,900.00
16	Salary Expense	154,700.00
17	Depreciation Expense-Building	15,600.00
18	Property Tax Expense	12,300.00
19	Heating and Lighting Expense	9,000.00
20	Supplies Expense	5,600.00
21	Depreciation Expense-Office Equipment	5,300.00
22	Miscellaneous Expense	3,200.00
23	Totals	741,900.00	741,900.00

The balance in Yost’s capital account includes an additional investment of $10,200 made on April 10, 20Y3.

	Required:
1.	Prepare an income statement for 20Y3. Create a separate statement indicating the division of net income to the partners. The partnership agreement provides for salary allowances of $45,400 to Lambert and $54,600 to Yost, allowances of 10% 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 20Y3.*
3.	Prepare a balance sheet as of the end of 20Y3.* * Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If a net loss is incurred or there is a decrease in partner’s equity, enter that amount as a negative number using a minus sign.

X

Accounts, Labels and Amount Descriptions

Accounts	Labels	Amount Descriptions
Accounts payable	Current assets	Add partner withdrawals
Accounts receivable	Current liabilities	Balance, December 31, 20Y3
Accumulated depreciation-Building	Operating expenses	Balance, January 1, 20Y3
Accumulated depreciation-Office equipment	Property, plant, and equipment	Balances after realization
Building		Balances before realization
Cash		Capital additions
Depreciation expense-Building		Partner withdrawals
Depreciation expense-Office Equipment		Net income
Heating and lighting expense		Net loss
Jayla Yost, capital		Net income for the year
Land		Net loss for the year
Miscellaneous expense		Payment of liabilities
Office equipment		Sale of assets and division of gain
Professional fees		Total assets
Property tax expense		Total current assets
Salaries payable		Total liabilities
Salary expense		Total liabilities and partners’ equity
Supplies		Total partners’ equity
Supplies expense		Total Property, plant, and equipment
Tyler Lambert, capital		Total operating expenses

X

Income Statement and Allocation to Partners

1. Prepare an income statement for 20Y3. Create a separate statement indicating the division of net income to the partners. The partnership agreement provides for salary allowances of $45,400 to Lambert and $54,600 to Yost, allowances of 10% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss. Refer to the information given and the lists of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If a net loss is incurred, enter that amount as a negative number using a minus sign.

Lambert and Yost

Income Statement

For the Year Ended December 31, 20Y3

1
2

Answer 1