In July 2017, Mr. Irving and Ms. Ruth formed a partnership to offer consulting services. Mr. Irving contributed $40,000 in cash to the partnership and Ms. Ruth contributed non-cash assets with a market value of $100,000. During its first year of operations, the partnership earned revenues of $184,000 and incurred expenses of $100,000. Mr. Irving and Ms. Ruth agreed to divide the profits of the partnership in proportion to the value of their initial contributions. During the year, Mr. Irving withdrew $10,000 in cash from the partnership and Ms. Ruth withdrew $14,000 in cash. The partnership’s first year-end is December 31, 2017.
a. Record the journal entries required for formation of the partnership.
b. Prepare the statement of partners’ capital on December 31, 2017.