The ledger of Peter Sato and May Koening, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 2008:The balance in Koening’s capital account includes an additional investment of $8,000 made on August 10, 2008.Instructions1. Prepare an income statement for 2008, indicating the division of net income. The articles of partnership provide for salary allowances of $40,000 to Sato and $50,000 to Koening, 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.2. Prepare a statement of partners’ equity for 2008.3. Prepare a balance sheet as of the end of2008.
The ledger of Peter Sato and May Koening attorneys at law cont