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  3. sharp and townson had capital balances of $60,000

Sharp and Townson had capital balances of $60,000 and $120,000, respectively, on January 1 of...

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Accounting

Sharp and Townson had capital balances of $60,000 and $120,000, respectively, on January 1 of the current year. On May 8, Sharp invested an additional $10,000 in the partnership. During the year, Sharp and Townson withdrew $25,000 and $45,000, respectively. The revenue account at the end of the year had a balance of $600,000, and the expense account had a balance of $510,000. Sharp and Townson have agreed to split net income on a 2:1 basis.

a. Prepare the statement of partnership equity for the current year. If an amount box does not require an entry, leave it blank.

b. Journalize the entries to close the revenue and expense accounts and the drawing accounts. If an amount box does not require an entry, leave it blank.

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