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Southern Skies Co

question 163

Essay

Southern Skies Co. had beginning capital balances on January 1 2017 as follows: Patty Sharp $30000 and Jim O'Connor $25000. During the year drawings were Sharp $15000 and O'Connor $8000. Net income was $40000 and the partners share income equally.
Instructions
Prepare the partners' capital statement for the year.


Definitions:

Partial Balance Sheet

A partial balance sheet presents only a section of a company's financial statements, typically focusing on either assets, liabilities, or equity at a specific point in time.

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect.

Direct Write-Off Method

The method of writing off uncollectibles when they occur and thus not using the Allowance for Doubtful Accounts. This method does not fulfill the matching principle of accrual accounting.

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