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. Lambert and Yost Income Statement For the Year Ended December 31, 20Y3 1 2 3 4 5 6 7 8 9 10 11 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 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 Lambert and Yost Balance Sheet December 31, 20Y3 1 Assets 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Liabilities 16 17 18 19 20 Partners’ Equity 21 22 23 24

Answer 1

1. Prepare Income Statement for 20Y3 and a statement indicating division of profit between partners in the following manner:

Lambert & Yost
Income Statement
For the Year Ending on 31st December, 20Y3
Particulars	Amount (in $)	Amount (in $)
Professional Fees		3,96,900.00
Operating Expenses:
Salary Expense	1,54,700.00
Depreciation Expense-Building	15,600.00
Property Tax Expense	12,300.00
Heating and Lighting Expense	9,000.00
Supplies Expense	5,600.00
Depreciation Expense-Office Equipment	5,300.00
Miscellaneous Expense	3,200.00
Total Operating expenses		2,05,700.00
Operating Income		1,91,200.00
Non-Operating Income (Expense)		-
Net Income		1,91,200.00

Statement of Division of Income between Partners
Particulars	Tyler Lambert ($)	Jayla Yost ($)	Total ($)
Net Income as per Income Summary			191200.00
Salary Allowances:
Tyler Lambert	45400.00
Jayla Yost		54600.00
Interest Allowances:
Tyler Lambert ($135,500 x 10%)	13550.00
Jayla Yost [($87,700 - $10,200) x 10%]		7750.00
Total Salaries and Interest	58950.00	62350.00	121300.00
Balance of Income			69900.00
Balance of Income allocated in the ratio of 1:1	34950.00	34950.00
Total Income allocated			69900.00
Balance of Income			0.00
Income of each partner	93900.00	97300.00

2. Prepare a statement of equity for 20Y3 in the following manner:

Statement of Partners' Equity
For the Period Ended December 31, 20Y3
Particulars	Equity	Total
Tyler Lambert ($)	Jayla Yost ($)
Opening Capital Balance	135500.00	77500.00	213000.00
Add:
Further Investment during the year	0.00	10200.00	10200.00
Salary Allowance	45400.00	54600.00	100000.00
Interest Allowance	13550.00	7750.00	21300.00
Allocation of Profit during the year	34950.00	34950.00	69900.00
	229400.00	185000.00	414400.00
Less:
Drawing	50200.00	59800.00	110000.00
Capital Balances after liquidation of assets and payment of creditors	179200.00	125200.00	304400.00

3. Prepare balance sheet as of the end of 20Y3 in the following manner:

Lambert & Yost
Balance Sheet
At December 31, 20Y3
Assets	Amount (in $)	Amount (in $)
Current Assets:
Cash		34,300.00
Accounts Receivable		48,300.00
Supplies		2,100.00
Total Current Assets		84,700.00
Property & Equipment:
Land		1,19,900.00
Building	1,57,900.00
Less:- Accumulated Depreciation-Building	66,800.00	91,100.00
Equipment	63,700.00
Less:- Accumulated Depreciation-Equipment	21,700.00	42,000.00
Total Assets		3,37,700.00
Liabilities & Shareholders' Equity	Amount (in $)	Amount (in $)
Current Liabilities:
Accounts Payable	28,400.00
Salary Payable	4,900.00
Total Current Liabilities		33,300.00
Long Term Liabilities:		-
Partners' Equity
Tyler Lambert	1,79,200.00
Jayla Yost	1,25,200.00
Total Partners' Fund		3,04,400.00
Total Liabilities & Partners' Equity		3,37,700.00