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Prepare a statement of partnership equity for the year ended December 31, 20Y5. If an amount box does not require an entry, leave it blank.

Prepare a statement of partnership equity for the year ended December 31, 20Y5. If an amount box does not require an entry, leave it blank.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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# Angel Investor Associates: Statement of Partnership Equity ## Overview The partnership of Angel Investor Associates commenced operations on January 1, 20Y5. The initial contributions from the partners were as follows: - **Dennis Overton:** $43,860 - **Ben Testerman:** $60,630 ### Key Transactions During the Year 1. **New Partner Admission:** In early January, Randy Campbell joined the partnership by contributing $24,510 in cash for a 19% interest in the business. 2. **Net Income Distribution:** The partnership earned a net income of $170,000 during 20Y5. Dennis Overton received a salary allowance of $40,000 for the year. After admitting Randy Campbell, the three partners agreed to an income-sharing ratio equal to their capital balances. 3. **Partner Withdrawals:** The partners made withdrawals equal to half of the increase in their capital balances resulting from the salary allowance and income. ### Statement of Partnership Equity The table below outlines the changes in partnership equity for each partner and the total partnership capital for the year ended December 31, 20Y5: | | Dennis Overton, Capital | Ben Testerman, Capital | Randy Campbell, Capital | Total Partnership Capital | |--------------------------------------|-------------------------|------------------------|-------------------------|---------------------------| | **Balances, January 1, 20Y5** | | | | | | **Admission of Randy Campbell** | | | | | | **Salary Allowance** | | | | | | **Remaining Income** | | | | | | **Partner Withdrawals** | | | | | | **Balances, December 31, 20Y5** | | | | | **Note:** If an amount box does not require an entry, please leave it blank.
Transcribed Image Text:# Angel Investor Associates: Statement of Partnership Equity ## Overview The partnership of Angel Investor Associates commenced operations on January 1, 20Y5. The initial contributions from the partners were as follows: - **Dennis Overton:** $43,860 - **Ben Testerman:** $60,630 ### Key Transactions During the Year 1. **New Partner Admission:** In early January, Randy Campbell joined the partnership by contributing $24,510 in cash for a 19% interest in the business. 2. **Net Income Distribution:** The partnership earned a net income of $170,000 during 20Y5. Dennis Overton received a salary allowance of $40,000 for the year. After admitting Randy Campbell, the three partners agreed to an income-sharing ratio equal to their capital balances. 3. **Partner Withdrawals:** The partners made withdrawals equal to half of the increase in their capital balances resulting from the salary allowance and income. ### Statement of Partnership Equity The table below outlines the changes in partnership equity for each partner and the total partnership capital for the year ended December 31, 20Y5: | | Dennis Overton, Capital | Ben Testerman, Capital | Randy Campbell, Capital | Total Partnership Capital | |--------------------------------------|-------------------------|------------------------|-------------------------|---------------------------| | **Balances, January 1, 20Y5** | | | | | | **Admission of Randy Campbell** | | | | | | **Salary Allowance** | | | | | | **Remaining Income** | | | | | | **Partner Withdrawals** | | | | | | **Balances, December 31, 20Y5** | | | | | **Note:** If an amount box does not require an entry, please leave it blank.
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