The partnership of Par and Boo was formed and commenced operations on March 1, 2016, with Par contributing $30,000 cash and Boo investing cash of $10,000 and equipment with an agreed-upon valuation of $20,000. On July 1, 2016, Boo invested an additional $10,000 in the partnership. Par made a capital withdrawal of $4,000 on May 2, 2016, but reinvested the $4,000 on October 1, 2016. During 2016, Par withdrew $800 per month, and Boo, the managing partner, withdrew $1,000 per month.
These drawings were charged to Salaries to partners. A preclosing trial balance taken at December 31, 2016, is as follows:

REQUIRED
1. Journalize the entries necessary to close the partnership books assuming that there is no agreement regarding profit distribution.
2. Prepare a statement of partnership capital assuming that the partnership agreement provides for monthly salary allowances of $800 and $1,000 for Par and Boo, respectively, and for the division of remaining profits in relation to average capital balances.
3. Prepare a profit distribution schedule for the Par and Boo partnership assuming monthly salary allowances of $800 and $1,000 for Par and Boo, respectively; interest allowances at a 12 percent annual rate on average capital balances; and remaining profits divided equally.

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Debit Credit Cash Receivables-net Equipment-net Other assets Liabilities Par capital Boo capital $9,000 15,000 50,000 19,000 $17,000 30,000 40,000 50,000 Service revenue Supplies expense Utilities expense Salaries to partners Other miscellaneous expenses 17,000 4,000 18,000 5,000 Total $137,000 $137,000