John Landis and Raymond Oliver formed a partnership on 1 July 2019, agreeing to share profits and losses in the ratio of 2:1. John contributed $30 000 in cash and land with a fair value of $180 000. Assets contributed to, and liabilities assumed by, the partnership from Raymond’s business at both carrying amount and fair value are shown below.

During the first year, John contributed an additional $12 000 in cash. The partnership’s profit was $56 000. John withdrew $8000 and Raymond withdrew $16 000 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 July 2019.

(c) Prepare a statement of changes in partners’ equity for the year ended 30 June 2020, using method 2 for recording partners’ equity accounts.

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Cash at bank Accounts receivable Inventory Office equipment Accounts payable Bank loan Carrying amount $22 500 12 800 24 76000 Fair value $22500 12 800 600 23 800 62000 11500 18000 11 500 18000