Question

In: Accounting

Assume that a business was started on January 1, 2003 when it acquired $60,000 cash from...

Assume that a business was started on January 1, 2003 when it

acquired $60,000 cash from its owner(s). During 2003 the

company generated $29,000 of cash services revenue,

incurred $19,000 of cash expenses, and distributed $4,000

cash to the owner(s).

•

Prepare a statement of changes in equity for this partnership:

–

Carl Link and Bill Morgan established the business as a

partnership. Link contributed 60% of the capital, Morgan

40%. The partners agreed to share profits and withdrawals

in proportion to their capital investments

Solutions

Expert Solution

Statement of changes in equity
Carl Link Bill Morgan Total
Capital Balance, Jan 1                   -                         -                     -  
Investment    36,000.00        24,000.00    60,000.00
Net Income      6,000.00          4,000.00    10,000.00
Withdrawals    (2,400.00)        (1,600.00)    (4,000.00)
Capital Balance, Dec 1    39,600.00        26,400.00    66,000.00

Workings:

Services Revenue          29,000
Expenses          19,000
Net Income          10,000


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