Samuel and Vinnie decided to form a partnership on 1 January 2017. They secured the services of a…

Samuel and Vinnie decided to form a partnership on 1 January 2017. They secured the services of a solicitor to draw up their partnership agreement as follows: a. Samuel is to contribute the following: • his vehicle valued at $72 000 • plant and equipment valued at $168 000 • accounts receivable totalling $28 800. b. Vinnie is to contribute the following: • cash totalling $48 000 • a building valued at $336 000 • a mortgage of $192 000. This was secured over the building, and the partnership agreed to assume this liability. It was also agreed that Samuel would act as manager with an annual salary of $120 000, to be allocated at the end of each year. Profits or losses would be divided between Samuel and Vinnie in the proportion 3/5 and 2/5 respectively. Gross profit for the year ended 31 December 2017 was $520 000, with operating expenses of $240 000. Samuel withdrew $24 000 and Vinnie withdrew $32 000 during the year. Required a. Prepare the balance sheet of the partnership on its formation (1 January 2017). b. Calculate each partner’s share of profit for the year ended 31 December 2017.

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