The partnership of Miner Company began operations on January 1, with contributions as follows: Waverley $35,000 Marquez 40,000 The following additional partner transactions took place during the year: In early January, Houston is admitted to the partnership by contributing $25,000 cash for a 25% interest. Net income of $160,000 was earned. In addition, Waverley received a salary allowance of $30,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting Houston. The partners' withdrawals are equal to half of their respective distributions of income after salary (i.e., half their respective portions of the $130,000). Required: Prepare a statement of partnership equity for the year ended December 31. If an amount box does not require an entry, leave it blank.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
The
| Waverley | $35,000 |
| Marquez | 40,000 |
The following additional partner transactions took place during the year:
- In early January, Houston is admitted to the partnership by contributing $25,000 cash for a 25% interest.
- Net income of $160,000 was earned. In addition, Waverley received a salary allowance of $30,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting Houston.
- The partners' withdrawals are equal to half of their respective distributions of income after salary (i.e., half their respective portions of the $130,000).
Required:
Prepare a statement of partnership equity for the year ended December 31. If an amount box does not require an entry, leave it blank.
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