Har, Ion, and Jer formed a partnership on January 1, 2016, with each partner contributing $20,000 cash.

Although the partnership agreement provided that Jer receive a salary of $1,000 per month for managing the partnership business, Jer has never withdrawn any money from the partnership. Har withdrew $4,000 in each of the years 2016 and 2017, and Ion invested an additional $8,000 in 2016 and withdrew $8,000 during 2017. Due to an oversight, the partnership has not maintained formal accounting records, but the following information as of December 31, 2017, is available:

Cash on hand ................................. $ 28,500

Due from customers ......................... 20,000

Merchandise on hand (at cost) .............. 40,000

Delivery equipment-net of depreciation ... 37,000

Prepaid expenses .............................. 4,000

Total Assets ..................................$129,500

Due to suppliers ...............................$ 14,600

Wages payable ................................ 4,400

Note payable ................................. 10,000

Interest payable ............................. 500

Total Liabilities ..............................$ 29,500

ADDITIONAL INFORMATION

1. The partners agree that income for 2017 was about half of the total income for the first two years of operations.

2. Although profits were not divided until 2017, the partnership agreement provides that profits, after allowance for Jer's salary, are to be divided each year on the basis of beginning-of-the-year capital balances.

REQUIRED:

Prepare statements of partnership capital for the years ended December 31, 2016, and December 31, 2017.