Below is an alphabetical listing of the accounts in the general ledger of Clay and Ogletree, LLP, at the partnership?s fiscal year end, September 30, 2021. Adjusting entries for the year have been posted and included in these balances.

Additional information:

1. The balance in Clay?s capital account includes an additional investment of $10,000 made during the year.

2. $5,000 of the note payable is due within the next year.

3. Clay and Ogletree share profi t and loss in the ratio of 3:2, respectively.

Instructions

a. Prepare an income statement, statement of partners? equity, and balance sheet.

b. Journalize the closing entries.

Taking It Further

Should the two partners draw equal amounts each year? Both of them work full-time for the partnership.

Transcribed Image Text:

Accounts payable Accounts receivable Accumulated depreciation-equipment $ 21,500 Interest expense M. Ogletree, capital M. Ogletree, drawings Note payable Prepaid insurance Property tax expense Salaries expense Service revenue Unearned revenue $ 5,000 37,500 100,000 22,500 3,500 15,000 225,000 515,000 24,000 105,000 13,500 12,000 60,000 75,000 150,000 18,500 Cash Depreciation expense Equipment G. Clay, capital G. Clay, drawings Insurance expense