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	47,600.00
3	Supplies	2,200.00
4	Land	120,400.00
5	Building	158,000.00
6	Accumulated Depreciation-Building		67,100.00
7	Office Equipment	63,800.00
8	Accumulated Depreciation-Office Equipment		21,500.00
9	Accounts Payable		28,400.00
10	Salaries Payable		4,600.00
11	Tyler Lambert, Capital		134,800.00
12	Tyler Lambert, Drawing	49,500.00
13	Jayla Yost, Capital		87,800.00
14	Jayla Yost, Drawing	59,800.00
15	Professional Fees		394,800.00
16	Salary Expense	154,300.00
17	Depreciation Expense-Building	15,200.00
18	Property Tax Expense	12,500.00
19	Heating and Lighting Expense	8,000.00
20	Supplies Expense	5,500.00
21	Depreciation Expense-Office Equipment	4,500.00
22	Miscellaneous Expense	3,400.00
23	Totals	739,000.00	739,000.00

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 $44,700 to Lambert and $55,100 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.

Answer 1

Answer :

Lambert and Yost's Income statement for the year ended Dec. 31,20Y3
Professional Fees		394,800.00
Operating Expenses:
Salary Expense	1,54,300.00
Supplies Expense	5,500.00
Depreciation expense-Building	15,200.00
Depreciation expense-Office Equipment	4,500.00
Property Tax Expense	12,500.00
Heating and Lighting expense	8,000.00
Miscellaneous Expense	3,400.00
Total Operating Expense		203,400.00
Operating Income		191,400.00

Lambert and Yost's Allocation of Net Income to Partners For the Year Ended December 31, 20Y3
	Tyler Lambert	Jayla Yost	Total
Division of net income:			191,400.00
Salary allowance	44,700.00	55,100.00	99,800.00
Interest allowance	13,480.00 ($134,800*10/100)	7,760.00 $87,800-$10,200= $77,600 *10/100)	21,240.00
Remaining income	35,180.00	35,180.00	70,360.00
Net income

Lambert and Yost Statement of Partnership Equity For the Year Ended December 31, 20Y3
	Tyler Lambert	Jayla Yost	Total
Capital, January 1, 2014	134,800.00	77,600.00	212,400.00
Additional investment during the year	-	10,200.00	10,200.00
Net income for the year	35,180.00	35,180.00	70,360.00
Salary Allowance	44,700	55,100.00	99,800.00
Interest on capital	13,480.00	7,760.00	21,240.00
Withdrawals during the year	-49,500.00	-59,800.00	- 109,300.00
Capital, December 31, 2014	178,660.00	126,040.00	304,700.00

Lambert and Yost Balance Sheet December 31, 20Y3
Assets
Current assets:
Cash	34,300.00
Accounts receivable	47,600.00
Supplies	2,200.00
Total current assets		84,100.00
Plant assets:
Land	120,400.00
Building	158,000.00
Less accumulated depreciation	-67,100.00	90,900
Office equipment	63,800.00
Less accumulated depreciation	-21,500.00	42,300
Total plant assets		253,600.00
Total assets			337,700.00
Liabilities
Current liabilities:
Accounts payable	28,400.00
Salaries payable	4,600.00
Total liabilities		33,000.00
Partners' Equity
Tyler Lambert, capital	178,660.00
Jayla Yost, capital	126,040.00
Total partners' equity		304,700.00
Total liabilities and partners' equity			337,700.00