2011 Jun. 10 Adam Buckner and Amber Kwan have agreed to pool their assets and form a partnership to be called B&K Consulting. They agree to share all profits equally and make the following initial investments:
__________________________________Buckner Kwan
Cash .......................................................... $15,000..........$30,000
Accounts receivable (net) ........................... 33,000............27,000
Office furniture........................................... 36,000............24,000
Dec. 31 The partnership's reported net income was $195,000 for the year ended December 31, 2011.
2012 Jan. 1 Buckner and Kwan agree to accept Heidi Nguen into the partnership with a $180,000 investment for 30 percent of the business. The partnership agreement is amended to provide for the following sharing of profits and losses:
_______________________________Buckner Kwan Nguen
Annual "salary"................................... $90,000.....$120,000........$75,000
Interest on capital balance........................... 5%...............5%..................5%
Balance in ratio of........................................ 3 :.............2 :................5
Dec. 31 The partnership's reported net income was $480,000.
2013 Oct. 10 Buckner withdrew $84,000 cash from the partnership and Kwan withdrew $57,000 (Nguen did not make any withdrawals).
Dec. 31 The partnership's reported net income was $255,000.
2014 Jan. 2 After a disagreement as to the direction in which the partnership should be moving, Nguen decided to withdraw from the partnership. The three partners agreed that Nguen could take cash of $300,000 in exchange for her equity in the partnership.
Required
1. Journalize all of the transactions for the partnership.
2. Prepare the partners' equity section of the balance sheet as of January 2, 2014.