For National Co., beginning capital balances on January 1, 2014, are Nancy Payne $20,000 and Ann Dody $18,000. During the year, drawings were Payne $8,000 and Dody $5,000. Net income was $40,000, and the partners share income equally.
(a) Prepare the partners’ capital statement for the year.
(b) Prepare the owners’ equity section of the balance sheet at December 31, 2014.