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in early january lance mcginnis is admitted to the partnership by contributing 50 00 554333

EX 12-16 Partner bonuses, statement of partners’ equity

The partnership of Angel Investor Associates began operations on January 1, 2012, with contributions from two partners as follows:

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Scott Wilson

$120,000

Michael Goforth

80,000

The following additional partner transactions took place during the year:

1. In early January, Lance McGinnis is admitted to the partnership by contributing $50,000 cash for a 20% interest.

2. Net income of $250,000 was earned in 2012. In addition, Scott Wilson received a salary allowance of $45,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting McGinnis.

3. The partners’ withdrawals are equal to half of the increase in their capital balances from salary allowance and income.

Prepare a statement of partnership equity for the year ended December 31, 2012.

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