Question

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, 20Y2:

Ramirez and Xue
Trial Balance
December 31, 20Y2
	Debit Balances		Credit Balances
Cash	48,300
Accounts Receivable	46,000
Supplies	1,700
Land	115,000
Building	124,800
Accumulated Depreciation—Building			71,900
Office Equipment	52,900
Accumulated Depreciation—Office Equipment			22,300
Accounts Payable			34,300
Salaries Payable			3,700
Camila Ramirez, Capital			120,000
Camila Ramirez, Drawing	51,800
Ping Xue, Capital			69,000
Ping Xue, Drawing	74,800
Professional Fees			412,200
Salary Expense	167,900
Depreciation Expense—Building	16,700
Heating and Lighting Expense	8,300
Depreciation Expense—Office Equipment	5,200
Property Tax Expense	10,400
Supplies Expense	6,000
Miscellaneous Expense	3,600
	733,400		733,400

The balance in Xue's capital account includes an additional investment of $12,000 made on May 5, 20Y2.

Required:

1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $45,000 to Ramirez and $54,000 to Xue, 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.

Ramirez and Xue Income Statement For the Year Ended December 31, 20Y2
		$fill in the blank 2
Operating expenses:
	$fill in the blank 4
	fill in the blank 6
	fill in the blank 8
	fill in the blank 10
	fill in the blank 12
	fill in the blank 14
	fill in the blank 16
Total operating expenses		fill in the blank 17
		$fill in the blank 19

Ramirez and Xue Division of Income For the Year Ended December 31, 20Y2
	Camila Ramirez	Ping Xue	Total
Division of net income:
Salary allowance	$fill in the blank 20	$fill in the blank 21	$fill in the blank 22
Interest allowance	fill in the blank 23	fill in the blank 24	fill in the blank 25
Remaining income	fill in the blank 26	fill in the blank 27	fill in the blank 28
Net income	$fill in the blank 29	$fill in the blank 30	$fill in the blank 31

2. Prepare a statement of partnership equity for 20Y2. If any amounts are zero, enter in "0".

Ramirez and Xue Statement of Partnership Equity For the Year Ended December 31, 20Y2
	Camila Ramirez	Ping Xue	Total
Balances, January 1, 20Y2	$fill in the blank 32	$fill in the blank 33	$fill in the blank 34
Capital additions	fill in the blank 35	fill in the blank 36	fill in the blank 37
Net income for the year	fill in the blank 38	fill in the blank 39	fill in the blank 40
Partner withdrawals	fill in the blank 41	fill in the blank 42	fill in the blank 43
Balances, December 31, 20Y2	$fill in the blank 44	$fill in the blank 45	$fill in the blank 46

3. Prepare a balance sheet as of the end of 20Y2.

Ramirez and Xue Balance Sheet December 31, 20Y2
Assets
Current assets:
		$fill in the blank 48
		fill in the blank 50
		fill in the blank 52
Total current assets			$fill in the blank 53
Property, plant, and equipment:
		$fill in the blank 55
	$fill in the blank 57
	fill in the blank 59	fill in the blank 60
	$fill in the blank 62
	fill in the blank 64	fill in the blank 65
Total property, plant, and equip.			fill in the blank 66
Total assets			$fill in the blank 67
Liabilities
Current liabilities:
		$fill in the blank 69
		fill in the blank 71
Total liabilities			fill in the blank 72
Partners' Equity
		$fill in the blank 74
		fill in the blank 76
Total partners' equity			fill in the blank 77
Total liabilities and partners' equity			$fill in the blank 78

Answer 1

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