The ledger of Dan Warrick and Ron Murphy, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 2008:The balance in Murphy’s capital account includes an additional investment of $20,000 made on April 5, 2008.Instructions1. Prepare an income statement for the current fiscal year, indicating the division of net income. The articles of partnership provide for salary allowances of $40,000 to Warrick and $50,000 to Murphy, allowances of 12% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.2. Prepare a statement of partners’ equity for 2008.3. Prepare a balance sheet as of the end of2008.
The ledger of Dan Warrick and Ron Murphy attorneys at law cont