Bob Spade and Ken Lundy have formed the partnership Art World, and have capital balances of $ 120,000 and $ 105,000, respectively on January 1, 2021. On June 1, 2021, Lundy invested an additional $ 20,000. Also, during the year, Spade withdrew $ 16,000 and Lundy withdrew $ 22,000. Sales for the year amounted to $ 850,000 and expenses were $ 520,000. After taking salary allowances of $ 60,000 and $ 90,000, respectively, Spade and Lundy share any remaining profit and losses on a 40% and 60% ratio, respectively.
Instructions
a) Prepare a schedule that shows the division of profit to each partner.
b) Prepare the closing entries at December 31, 2021, for the Art World partnership.
c) Prepare a statement of partners' equity for 2021.

Question

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The Answer of Bob Spade and Ken Lundy have formed the partnership Art World, and have capital balances of $ 120,000 and $ 105,000, respectively on January 1, 2021. On June 1, 2021, Lundy invested an additional $ 20,000. Also, during the year, Spade withdrew $ 16,000 and Lundy withdrew $ 22,000. Sales for the year amounted to $ 850,000 and expenses were $ 520,000. After taking salary allowances of $ 60,000 and $ 90,000, respectively, Spade and Lundy share any remaining profit and losses on a 40% and 60% ratio, respectively.
Instructions
a) Prepare a schedule that shows the division of profit to each partner.
b) Prepare the closing entries at December 31, 2021, for the Art World partnership.
c) Prepare a statement of partners' equity for 2021.

Bob Spade and Ken Lundy Have Formed the Partnership Art