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

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

Step-by-step 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