Question

The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y2: Ramirez and Xue Trial Balance December 31, 20Y2 Debit Balances Credit Balances Cash 38,600 Accounts Receivable 36,800 Supplies 1,400 Land 92,000 Building 101,300 Accumulated Depreciation—Building 57,500 Office Equipment 42,300 Accumulated Depreciation—Office Equipment 17,800 Accounts Payable 27,400 Salaries Payable 2,900 Camila Ramirez, Capital 90,000 Camila Ramirez, Drawing 41,400 Ping Xue, Capital 55,200 Ping Xue, Drawing 59,800 Professional Fees 337,100 Salary Expense 134,300 Depreciation Expense—Building 13,300 Property Tax Expense 8,300 Heating and Lighting Expense 6,600 Supplies Expense 4,800 Depreciation Expense—Office Equipment 4,100 Miscellaneous Expense 2,900 587,900 587,900 The balance in Xue' capital account includes an additional investment of $9,000 made on May 5, 20Y2. Required: 1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $37,000 to Ramirez and $46,000 to Xue, allowances of 10% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.

Answer 1

Income Statement

for the eyar ended Dec 31, 20Y2

Particulars	Amount
Revenues	-
Professional Fees	337,100
Less : Expenses
Salaries expense	(134,300)
Depreciation Expense	(13,300)
Property Tax Expense	(8,300)
Heating and Lighting Expenses	(6,600)
Supplies Expenses	(4,800)
Depreciation Expense - Office Equipment	(4,100)
Miscellaneous Expense	(2,900)
Salaries to partners ( 37,000 + 46,000)	(83,000)
Interest on Capital (10%) (9,000 + 5520)	(14,520)
Net Income	65,280
Camila Remirez	32,640
Ping Xue	32,640