The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 2016:

The balance in Xue's capital account includes an additional investment of $20,000 made on May 5, 2016.
Instructions
1. Prepare an income statement for the current fiscal year, indicating the division of net income. The partnership agreement provides for salary allowances of $50,000 to Ramirez and $65,000 to Xue, allowances of 12% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.
2. Prepare a statement of partnership equity for 2016.
3. Prepare a balance sheet as of the end of 2016?

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Ramirez and Xue Trial Balance December 31, 2016 Debit Balances 70,300 33,600 5,800 128,000 175,000 Credit Balances Cash Accounts Receivable Supplies Land Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Salaries Payable Camila Ramirez, Capital Camila Ramirez, Drawing Ping Xue, Capital Ping Xue, Drawing 42,000 25,300 12,400 10,000 125,000 35,000 155,000 50,000 555,300 Salary Expense Depreciation Expense-Building Heating and Lighting Expense Depreciation Expense-Office Equipment Property Tax Expense Supplies Expense Miscellaneous Expense 384,900 12,900 10,500 3,000 963,000 963,000