The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3:

The balance in Yost’s capital account includes an additional investment of $10,000 made on April 10, 20Y3.

Instructions

1. Prepare an income statement for 20Y3, indicating the division of net income. The partnership agreement provides for salary allowances of $45,000 to Lambert and $54,700 to Yost, allowances of 10% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.

2. Prepare a statement of partnership equity for 20Y3.

3. Prepare a balance sheet as of the end of 20Y3.

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Lambert and Yost Trial Balance December 31, 20Y3 Debit Balances Credit Balances 34,000 47,800 2,000 120,000 157,500 Cash Accounts Receivable Supplies Land Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Salaries Payable Tyler Lambert, Capital Tyler Lambert, Drawing Jayla Yost, Capital Jayla Yost, Drawing 67,200 63,600 21,700 27,900 5,100 135,000 50,000 88,000 60,000 Professional Fees 395,300 Salary Expense Depreciation Expense-Building Property Tax Expense 154,500 15,700 12,000 Heating and Lighting Expense Supplies Expense Depreciation Expense-Office Equipment Miscellaneous Expense 8,500 6,000 5,000 3.600 740,200 740,200