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	33,800.00
2	Accounts Receivable	47,300.00
3	Supplies	2,000.00
4	Land	120,300.00
5	Building	157,200.00
6	Accumulated Depreciation-Building		67,700.00
7	Office Equipment	63,300.00
8	Accumulated Depreciation-Office Equipment		21,900.00
9	Accounts Payable		28,400.00
10	Salaries Payable		4,800.00
11	Tyler Lambert, Capital		134,500.00
12	Tyler Lambert, Drawing	50,100.00
13	Jayla Yost, Capital		87,600.00
14	Jayla Yost, Drawing	59,500.00
15	Professional Fees		392,600.00
16	Salary Expense	154,100.00
17	Depreciation Expense-Building	15,300.00
18	Property Tax Expense	12,000.00
19	Heating and Lighting Expense	8,200.00
20	Supplies Expense	6,000.00
21	Depreciation Expense-Office Equipment	4,800.00
22	Miscellaneous Expense	3,600.00
23	Totals	737,500.00	737,500.00

The balance in Yost’s capital account includes an additional investment of $10,500 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 $54,200 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.

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Accounts, Labels and Amount Descriptions

Accounts	Labels In CengageNOW, a Label is a text entry that does not have an amount associated with it.	Amount Descriptions In CengageNOW, an Amount Description is a text entry other than an Account that has an amount associated with it.
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
You are in Column AccountsTyler Lambert, capital		Total operating expenses

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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 $54,200 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.

Question not attempted.

Lambert and Yost

Income Statement

For the Year Ended December 31, 20Y3

1
2
3
4
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6
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8	Depreciation expense-Office Equipment
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Solution

Lambert and Yost

Income Statement

For the Year Ended December 31, 20Y3

1
2
3
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Points:

Question not attempted.

Lambert and Yost

Allocation of Net Income to Partners

For the Year Ended December 31, 20Y3

1		Tyler Lambert	Jayla Yost	Total
2	Division of net income:
3	Salary allowance
4	Interest allowance
5	Remaining income (loss) (1:1)
6	Net income

Solution

Lambert and Yost

Allocation of Net Income to Partners

For the Year Ended December 31, 20Y3

1		Tyler Lambert	Jayla Yost	Total
2	Division of net income:
3	Salary allowance
4	Interest allowance
5	Remaining income (loss) (1:1)
6	Net income

Points:

Feedback

Check My Work

Explanation

none

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Statement of Partnership Equity

2. Prepare a statement of partnership equity for 20Y3. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If there is a decrease in partner’s equity, enter that amount as a negative number using a minus sign.

Question not attempted.

Lambert and Yost

Statement of Partnership Equity

For the Year Ended December 31, 20Y3

1		Tyler Lambert	Jayla Yost	Total
2
3
4
5
6

Answer 1

Lambert and Yost
Income Statement
For the Year ended December 31, 20Y3
Particulars		Amount ($)
1	Income
2	Revenue from Operation	3,92,600
3	Total	3,92,600
4	Expenses
5	Changes in Inventroy	6,000
6	Employee benefit	2,53,700
7	Depreication expense - Building	15,300
8	Depreication expense - Office Equipment	4,800
9	Operating expenses	46,010
10	Total	3,25,810
11	Profit for the Year	66,790

Lambert and Yost
Allocation of Net Income to Partners
For the Year ended December 31, 20Y3
1		Tyler Lambert	Jayla Yost	Total
2	Division of Income	33,395	33,395	66,790
3	Salary Allowance	45,400	54,200	99,600
4	Interest Allowance	13,450	8,760	22,210
5	Remaining Income (Loss) (1:1)	-	-	-
6	Net Income	92,245	96,355	1,88,600

Lambert and Yost
Statement of Partnership Equity
For the Year ended December 31, 20Y3
1		Tyler Lambert	Jayla Yost	Total
2	Capital Account	1,34,500	87,600	2,22,100
3	Drawings	-50,100	-59,500	-1,09,600
4	Net Income	92,245	96,355	1,88,600
5	Amount Transferred to Balance Sheet	1,76,645	1,24,455	3,01,100

Lambert and Yost
Balance Sheet
As on December 31, Year 2019
Particulars		Amount ($)
(A)	Equity & Liabilities
1	Equity
	Partner's Capital	3,01,100
2	Current Liabilities
	Accounts Payable	28,400
	Other Current Liabilities	4,800
3	Total	3,34,300
(B)	Assets
1	Non Current Assets
	Property Plant and Equipment	2,51,200
2	Current Assets
	Inventory	2,000
	Accounts Receivable	47,300
	Cash and Cash Equivalent	33,800
3	Total	3,34,300