Question

For Sunland Co., beginning capital balances on January 1, 2020, are Nancy Payne $18,900 and Ann Dody $24,000. During the year, drawings were Payne $8,700 and Dody $5,200. Net income was $28,700, and the partners share income equally.
Show the partners' capital statement for the year and show the owners' equity section of the balance sheet at December 31, 2020.

Answer 1

Answer and Explanation:

The preparation of the partner capital statement and the owner equity section is presented below:

Partner capital statement

Particulars           N. Payne        Ann Dody         Total

Beginning

balance                $18,900          $24,000           $42,900

Less: Drawings    -$8,700         -$5,200            -$13,900

Balance left           $10,200       $18,800              $29,000

Add: Net income

share 50% 50%     $14,350       $14,350             $28,700

ending balance       $24,550    $33,150             $57,700

Now the balance sheet is

Sunland Co,

Partial balance sheet

Dec 31,2020

Owner capital

Partner capital balance    $29,000

Add: Net income              $28,700

Total owner equity            $57,700