Kimble, Sykes, and Gerard open an accounting practice on January $1,2019,$ in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $$258,000,$ $$205,000,$ and $$117,000,$ respectively. An articles of partnership agreement is drawn up stipulating the following:

Personal drawings are allowed annually up to an amount equal to $10$ percent of the partner's beginning capital balance for the year.

Profits and losses are allocated according to the following plan:

Each partner receives an annual salary allowance of $$55$ per billable hours worked.

Interest is credited to the partners$$ capital accounts at the rate of $12$ percent of the beginning capital balance for the year.

Kimble and Sykes are eligible for an annual bonus of $10$ percent of net income after subtracting the bonus, salary allowance, and interest. The agreement also states that there will be no bonus if there is a net loss or if salary and interest result in a negative remainder of net income to be distributed.

Any remaining partnership profit or loss is to be divided evenly among all partners.

On January $1,2020,$ the partners admit Nichols to the partnership. Nichols contributes cash directly to the business in an amount equal to a $25$ percent interest in the book value of the partnership property subsequent to this contribution. The partnership profit and loss sharing agreement is not altered upon Nichols' entrance into the firm; the general provisions continue to be applicable.

The billable hours for the partners during the first three years of operation follow:

$201920202021$

Kimble $2,9001,8001,880$

Sykes $2,6401,5001,620$

Gerard $2,5001,3801,310$

Nichols $01,5601,550$

The partnership reports net income $($loss$)$ for $2019$ through $2021$ as follows:

$2019$ $ $312,000$

$2020(15,400)$

$2021507,000$

Each partner withdraws the maximum allowable amount each year.

Prepare schedules that allocate each year's net income to the partners.

Prepare in appropriate form a statement of partners$$ capital for the year ending December $31,2021.$