Following are the adjusted account balances of Davis and

Rodriguez
Following are the adjusted account balances of Davis and Rodriguez LLP as of December 31,
the end of the current fiscal year. Accounts Payable ................ $ 67,782Accounts Receivable
............... 54,507Accumulated Depreciation, Equipment ....... 46,287Allowance for Doubtful
Accounts ........... 1,879Cash ..................... 73,231C. E. Davis, Capital ............... 61,200C. E.
Davis, Drawing ............... 32,640Equipment .................. 75,315Freight In ...................
22,488General Expenses (control) ............. 14,939Interest Expense .................
3,500Merchandise Inventory, December 31 ........ 132,042Notes Payable (current) .............
29,900Prepaid Insurance ................ 735Purchases ................... 540,716Purchases Discounts
.............. 4,305Purchases Returns and Allowances ......... 25,960S. A. Rodriguez, Capital
............. 49,960S. A. Rodriguez, Drawing ............. 24,480Sales .................... 775,500Sales
Returns and Allowances .......... 37,575Selling Expenses (control) ............ 38,588There were no
changes in the partners’ Capital accounts during the year. The merchandise inventory at the
beginning of the year was $ 144,059. The partnership agreement provides for salary allowances
of $ 63,000 for Davis and $ 59,000 for Rodriguez. It also stipulates an interest allowance of 10
percent on invested capital at the beginning of the year, with the remainder of the net income to
be divided equally. Required 1. Prepare an income statement for the year. 2. Prepare a
statement of partners’ equity for the year. 3. Prepare a classified balance sheet for the
partnership at the end of the year.View Solution: Following are the adjusted account balances of
Davis and Rodriguez
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