Theresa Doran and Roy Eden are partners in a business called D & E Sales. The partnership's work sheet for the year ended December 31 of the current year is provided in the Working Papers. 

Instructions:

1. Prepare an income statement. Calculate and record the component percentages for cost of merchandise. sold, gross profit on operations, total operating expenses, and net income or net loss. Round percentage calculations to the nearest 0.1%. If there is a net loss, use a minus sign with the component percentage.

2. Prepare a distribution of net income statement. Each partner is to receive 10% interest on January 1 equity. The January 1 equity is Theresa, \($24,250.00\) and Roy, \($21,500.00.\) Also, partners' salaries are Theresa, \($12,000.00\) and Roy, \($10,000.00.\) The remaining net income, net loss, or deficit is shared as follows: Theresa, 55%; Roy, 45%. 

3. Prepare an owners' equity statement. 4. Prepare a balance sheet.