Anthony Chu and Adrian Tan formed a partnership on 1 January 2019, agreeing to share profits and losses equally. Anthony contributed $80 000 in cash, plant and equipment with a fair value of $120 000. Assets contributed to and liabilities assumed by the partnership from Adrian’s business at both carrying amount and fair value are shown below.

During the first year, Anthony contributed an additional $24 000 in cash. The partnership’s profit was $96 000. Anthony withdrew $16 000 and Adrian withdrew $18 000 in expectation of profits (ignore GST).

Required

(a) Prepare the journal entries to record each partner’s initial investment.

(b) Prepare the partnership’s balance sheet as at 1 January 2019.

(c) Prepare a statement of changes in partners’ equity for the year ended 31 December 2019, using method 1 for recording partners’ equity accounts.

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Cash at bank Accounts receivable Inventory Building Carrying amount $ 12600 22 500 32 500 220000 Fair value $ 12600 22 500 30 400 480000 Accounts payable 18500 18500 Bank loan 180000 180000