Question

Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $85,800 cash from Busby and $174,200 from Beatty. During Year 1, the partnership earned $60.000 in cash revenues and paid $42.000 for cash expenses. Busby withdrew $2.400 cash from the business, and Beatty withdrew $2,900 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business

Answer 1

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c.	B & B partnership
	Balance Sheet
	As on December 31, 2018
	Assets:
	Cash	$   2,72,700
	Total Assets		$ 2,72,700
	Liabilities
	Equity
	F. Busby , Capital	$       89,340
	J. Beatty , Capital	$   1,83,360
	Total Liabilities and Equity		$ 2,72,700
	Workings:
a.	B & B partnership
	Income Statement
	Cash Revenues	$       60,000
	Cash Expenses	$       42,000
	Net Income for the year	$       18,000
b.	Capital Statement	Busby	Beatty
	Beginning capital balance	$       85,800	$ 1,74,200
Less:	Withdrwals	$        -2,400	$     -2,900
Add:	Net Income	$         5,940	$     12,060
	Ending Capital balance	$       89,340	$ 1,83,360