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	51,700
Accounts Receivable	49,200
Supplies	1,800
Land	123,000
Building	134,000
Accumulated Depreciation—Building			76,900
Office Equipment	56,600
Accumulated Depreciation—Office Equipment			23,900
Accounts Payable			36,700
Salaries Payable			3,900
Camila Ramirez, Capital			120,000
Camila Ramirez, Drawing	55,400
Ping Xue, Capital			73,800
Ping Xue, Drawing	80,000
Professional Fees			449,600
Salary Expense	179,600
Depreciation Expense—Building	17,800
Property Tax Expense	11,100
Heating and Lighting Expense	8,900
Supplies Expense	6,400
Depreciation Expense—Office Equipment	5,500
Miscellaneous Expense	3,800
	784,800		784,800

The balance in Xue' capital account includes an additional investment of $13,000 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 $50,000 to Ramirez and $61,000 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
Professional Fees
Operating expenses:
Salary Expense
Depreciation Expense-Building
Property Tax Expense
Heating and Lighting Expense
Supplies Expense
Depreciation Expense-office Equipment
Miscellaneous Expense
Total operating expenses
Net Income		$

Ramirez and Xue Division of Income For the Year Ended December 31, 20Y2
	Camila Ramirez	Ping Xue	Total
Division of net income:
Salary allowance
Interest allowance
Remaining income
Net income

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
Capital additions
Net income for the year
Partner withdrawals
Balances, December 31, 20Y2	$	$	$

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

Ramirez and Xue Balance Sheet December 31, 20Y2
Assets
Current assets:
Total current assets			$
Property, plant, and equipment:
Total property, plant, and equip.
Total assets			$
Liabilities
Current liabilities:
Total liabilities
Partners' Equity
Total partners' equity
Total liabilities and partners' equity			$

Answer 1

RAMIREZ AND XUE Income Statement For the Year Ended December 31, 20x2 Professional fees Operating expenses: Salary expense 449600 179600 Depreciation expense - building Heating and lighting expense 17800 8900 Depreciation expense - office equipment 5500 Property tax expense 11100 Supplies expense Miscellaneous expense 6400 3800 Total operating expenses 233100 Net income 216500 RAMIREZ AND XUE Division of net income For the Year Ended December 31, 20x2 Camilla Ping Ramirez Xue Total Division of net income: Salary allowance Interest allowance Remaining income (loss) Net income 216500 61000 111000 50000 6080 12000 18080 43710 43710 87420 105710 110790 216500

RAMIREZ AND XUE Statement of Partnership Equity For the Year Ended December 31, 20x2 Camilla Ping Total Ramirez Xue Capital, January 1, 20x1 Additional investment during the year 60800 180800 120000 13000 13000 73800 193800 Subtotal 120000 Net income for the year 105710 110790 216500 225710 184590 410300 Subtotal Withdrawals during the year 80000 135400 170310 104590 274900 55400 Capital, December 31, 2016 RAMIREZ AND XUE Balance Sheet December 31, 20x2 Assets Current assets: Cash 51700 Accounts receivable 49200 Supplies 1800 Total current assets 102700 Plant assets: Land 123000 Building 134000 Less accumulated depreciation 76900 57100 Office equipment Less accumulated depreciation 56600 23900 32700 Total plant assets 212800 Total assets 315500 Liabilities Current liabilities: Accounts payable Salaries payable Total liabilities 36700 3900 40600 Partners' Equity Camila Ramirez, capital Ping Xue, capital Total partners' equity Total liabilities and partners' equity 170310 104590 274900 315500