Joy Webster and Diana Ruiz have been in business since the beginning of the year. Now at the end of the year, they would like to know how the partnership has done in its first year of operation. Joy and Diana stated in the partnership agreement that they will share profits equally. The net income for the year was $5,780. The January 1 capital balances for both partners were $0. Joy invested $6,000 cash in the partnership throughout the year and withdrew $1,800. Diana invested $5,500 cash in the partner ship and withdrew $1,200.

Instructions

In your working papers, prepare the Division of Net Income section of the income statement and the Partners’ Equity section of the balance sheet for the partnership.