Francine Steele and Shaun Dunn formed a partnership on 1 July 2025. Some of Steele’s business assets and liabilities were assumed by the partnership, and these are listed below at both carrying amounts and fair value.

Dunn contributed a commercial property to the partnership that had a fair value of $670000 which was financed by a mortgage of $220000. They agreed to share profits and losses evenly. During the first year of the partnership, Steele invested $80000 in the business and withdrew $20000. Dunn invested $82000 and withdrew $24000. The partnership had a profit of $132800. Retained Earnings accounts are not used.
Required

(a) Prepare the journal entries to record the initial investments of both partners. (Assume no GST.)

(b) Prepare a balance sheet as at 1 July 2025.

(c) Prepare a statement of changes in partners’ equity for the year ended 30 June 2026.

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Cash at bank Accounts receivable Inventory Carrying amount $ 62000 34 000 98 600 Equipment Accounts payable Loan 320 000 24000 80 000 Fair value $ 62000 34 000 96 000 360 000 24000 80 000