Answer:
The allocation of net income and its impact on partners' equity balances should be disclosed on the partnership's "Statement of Partners' Equity" or "Statement of Changes in Partners' Equity."
Step-by-step explanation:
This financial statement provides a summary of how the partners' equity accounts change over a specific period, including the allocation of net income or loss among the partners. It shows the beginning and ending balances of each partner's capital account, taking into account contributions, withdrawals, and the allocation of profits or losses. This statement helps partners and external stakeholders understand how the partnership's financial position changes over time.