The partnership of Parker and Boone was formed and commenced operations on March 1, 2011, with Parker contributing $30,000 cash and Boone investing cash of $10,000 and equipment with an agreed-upon valuation of $20,000. On July 1, 2011, Boone invested an additional $10,000 in the partnership. Parker made a capital withdrawal of $4,000 on May 2, 2011, but reinvested the $4,000 on October 1, 2011. During 2011, Parker withdrew $800 per month, and Boone, the managing partner, withdrew $1,000 per month. These drawings were charged to salary expense. A preclosing trial balance taken at December 31, 2011, is as follows:

REQUIRED1. 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 Parker and Boone, respectively, and for the division of remaining profits in relation to average capital balances.3. Prepare a profit distribution schedule for the Parker and Boone partnership assuming monthly salary allowances of $800 and $1,000 for Parker and Boone, respectively; interest allowances at a 12 percent annual rate on average capital balances; and remaining profits divided equally.

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