Exercise 12-8 Preparing a statement of partners equity LO P2

Mike and Rachel form M&R Partnership. Mike invests $52,000 cash and Rachel invests $72,000 cash. The partners agree to share income as follows: Mike gets a salary allowance of $5,000 per year and Rachel gets a salary allowance of $10,200 per year; both get an annual interest allowance of 10% on their initial investment; and any remaining balance is shared equally. Net income for the year is $42,000. Also, Mike withdrew $2,200 cash from the partnership and Rachel withdrew $3,200. Prepare a statement of partners equity for the year ended December 31. (Do not round intermediate calculations. Enter all allowances as positive values. Enter losses as negative values.)

M&R PARTNERSHIP Statement of Partners' Equity For Year Ended December 31 Mike Rachel Total 0 Initial partnership investments Net income Total net income 0 Total 0 0 0 0 $ 0 $ 0 $ 0