Following are the adjusted account balances of Davis and Rodriguez
Following are the adjusted account balances of Davis and Rodriguez LLP as of December 31, the end of the current fiscal year.
Accounts Payable ................ $ 67,782
Accounts Receivable ............... 54,507
Accumulated Depreciation, Equipment ....... 46,287
Allowance for Doubtful Accounts ........... 1,879
Cash ..................... 73,231
C. E. Davis, Capital ............... 61,200
C. E. Davis, Drawing ............... 32,640
Equipment .................. 75,315
Freight In ................... 22,488
General Expenses (control) ............. 14,939
Interest Expense ................. 3,500
Merchandise Inventory, December 31 ........ 132,042
Notes Payable (current) ............. 29,900
Prepaid Insurance ................ 735
Purchases ................... 540,716
Purchases Discounts .............. 4,305
Purchases Returns and Allowances ......... 25,960
S. A. Rodriguez, Capital ............. 49,960
S. A. Rodriguez, Drawing ............. 24,480
Sales .................... 775,500
Sales Returns and Allowances .......... 37,575
Selling Expenses (control) ............ 38,588
There were no changes in the partners’ Capital accounts during the year. The merchandise inventory at the beginning of the year was $ 144,059. The partnership agreement provides for salary allowances of $ 63,000 for Davis and $ 59,000 for Rodriguez. It also stipulates an interest allowance of 10 percent on invested capital at the beginning of the year, with the remainder of the net income to be divided equally.

Required
1. Prepare an income statement for the year.
2. Prepare a statement of partners’ equity for the year.
3. Prepare a classified balance sheet for the partnership at the end of the year.

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help