Faith Busby and Jeremy Beatty started the B&B partnership on January 1, 2018. The business acquired $86,400 cash from Busby and $153,600 from Beatty. During 2018, the partnership earned $68,900 in cash revenues and paid $32,800 for cash expenses. Busby withdrew $3,000 cash from the business, and Beatty withdrew $3,700 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business. Required: Prepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for B&B’s 2018 fiscal year.
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.
Faith Busby and Jeremy Beatty started the B&B partnership on January 1, 2018. The business acquired $86,400 cash from Busby and $153,600 from Beatty. During 2018, the partnership earned $68,900 in cash revenues and paid $32,800 for cash expenses. Busby withdrew $3,000 cash from the business, and Beatty withdrew $3,700 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business.
Required:
Prepare an income statement, capital statement (statement of changes in equity),
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