Question

The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3:
Lambert and Cost
ADJUSTED TRIAL BALANCE
December 31, 20Y3
ACCOUNT TITLE DEBIT CREDIT
1 Cash 33,600.00
2 Accounts Receivable 47,500.00
3 Supplies 2,200.00
4 Land 119,500.00
5 Building 157,200.00
6 Accumulated Depreciation-Building 67,400.00
7 Office Equipment 63,800.00
8 Accumulated Depreciation-Office Equipment 21,700.00
9 Accounts Payable 27,500.00
10 Salaries Payable 5,100.00
11 Tyler Lambert, Capital 135,400.00
12 Tyler Lambert, Drawing 49,500.00
13 Jayla Yost, Capital 88,100.00
14 Jayla Yost, Drawing 59,900.00
15 Professional Fees 394,500.00
16 Salary Expense 155,000.00
17 Depreciation Expense-Building 15,600.00
18 Property Tax Expense 12,300.00
19 Heating and Lighting Expense 8,400.00
20 Supplies Expense 5,800.00
21 Depreciation Expense-Office Equipment 5,300.00
22 Miscellaneous Expense 4,100.00
23 Totals 739,700.00 739,700.00
The balance in Yost’s capital account includes an additional investment of $10,200 made on April 10, 2016.
Required:
1. Prepare an income statement for 2016. Create a separate statement indicating the division of net income to the partners. The partnership agreement provides for salary allowances of $45,100 to Lambert and $54,500 to Yost, 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 partnership equity for 2016.
3. Prepare a balance sheet as of the end of 2016.

Answer 1

Answer:

Tyler Lambert and Jayla Yost, LLC.

1. Income Statement for the year ended December 31, 2016

15 Professional Fees                                           394,500

16 Salary Expense                                 155,000

17 Depreciation Expense-Building         15,600

18 Property Tax Expense                        12,300

19 Heating and Lighting Expense           8,400

20 Supplies Expense                              5,800

21 Depreciation Exp.-Office Equipment 5,300

22 Miscellaneous Expense                     4,100 206,500

Net income                                                          188,000

Division of net income to the partners:

                                            Lambert        Yost         Total

Salary allowance                $45,100      $54,500    $99,600

Interest on capital                13,540            8,810      22,350

Share of the remainder      33,025        33,025      66,050

Total                                   $91,665     $96,335   $188,000

2. Statement of Partnership Equity for the year 2016:

                               Lambert        Yost         Total

Balance                 $135,400     $88,100      $223,500

Drawings                (49,500)    (59,900)        (109,400)

Share of profit         91,665       96,335          188,000

Capital balance   $177,565   $124,535        $302,100

3. Balance Sheet as of December 31, 2016

1 Cash                                                         33,600

2 Accounts Receivable                              47,500

3 Supplies                                                    2,200      $83,300

Long-term assets:

4 Land                                                         119,500

5 Building                                                   157,200

6 Accumulated Depreciation-Building     (67,400)

7 Office Equipment                                    63,800

8 Accumulated Depreciation-Equipment (21,700) $251,400

Total assets                                                             $334,700

Liabilities and Partners' Equity:

9 Accounts Payable                                                   27,500

10 Salaries Payable                                                       5,100

Total liabilities                                                         $32,600

Partners' Equity:

11 Tyler Lambert, Capital                                        177,565

12 Jayla Yost, Capital                                             124,535

Total equity                                                          $302,100

Total liabilities and equity                                   $334,700

Explanation:

a) Data and Calculations:

Lambert and Yost

ADJUSTED TRIAL BALANCE

December 31, 20Y3

ACCOUNT TITLE                                       DEBIT     CREDIT

1 Cash                                                        33,600

2 Accounts Receivable                             47,500

3 Supplies                                                   2,200

4 Land                                                      119,500

5 Building                                                157,200

6 Accumulated Depreciation-Building                     67,400

7 Office Equipment                                  63,800

8 Accumulated Depreciation-Office Equipment     21,700

9 Accounts Payable                                                 27,500

10 Salaries Payable                                                     5,100

11 Tyler Lambert, Capital                                        135,400

12 Tyler Lambert, Drawing                     49,500

13 Jayla Yost, Capital                                               88,100

14 Jayla Yost, Drawing                           59,900

15 Professional Fees                                           394,500

16 Salary Expense                                 155,000

17 Depreciation Expense-Building         15,600

18 Property Tax Expense                        12,300

19 Heating and Lighting Expense           8,400

20 Supplies Expense                              5,800

21 Depreciation Exp.-Office Equipment 5,300

22 Miscellaneous Expense                     4,100

23 Totals                                             739,700 739,700