The ledger of Dan Yamada and Courtney Forte, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 2010:

The balance in Forte’s capital account includes an additional investment of $10,000 made on August 10, 2010.

Instructions

1. Prepare an income statement for 2010, indicating the division of net income. The articles of partnership provide for salary allowances of $40,000 to Yamada and $50,000 to Forte, 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.

2. Prepare a statement of partners’ equity for 2010.

3. Prepare a balance sheet as of the end of 2010.

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Credit Balances Debit Balances Cash 32,000 42,300 1,500 75,000 128,100 Accounts Receivable Supplies Land Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Salaries Payable Dan Yamada, Capital Dan Yamada, Drawing Courtney Forte, Capital Courtney Forte, Drawing Professional Fees 62,500 46,000 19,400 4,800 3,200 120,000 45,000 75,000 65,000 340,300 Salary Expense Depreciation Expense-Building Property Tax Expense Heating and Lighting Expense Supplies Expense Depreciation Expense-Office Equipment Miscellaneous Expense 146,800 14,500 9,000 7,200 5,200 4,500 3,100 625,200 625,200