Your first step is to make a statement of the ledger accounts, including all except the capital accounts of the partners. This statement gives you the following information:
| Personal Accounts, Debit Balances | $189.25 |
| Personal Accounts, Credit Balances | 2,828.50 |
| Cash in Bank | 7,313.73 |
You also balance the cash book and compare the balance with the cash in drawer, and find that the amount shown, $21.60, is correct.
In the meantime an inventory is being taken. When completed, the results shown are:
| Merchandise | $2,114.50 |
| Furniture and Fixtures | 2,000.00 |
The next step is to make a statement of assets and liabilities for the purpose of finding the present worth of the business.
| STATEMENT OF ASSETS AND LIABILITIES | ||
|---|---|---|
| Assets | ||
| Cash in Bank (Ledger) | $7,313.73 | |
| Cash in Office (Cash Book) | 21.60 | |
| Personal Accounts (Ledger) | 189.25 | |
| Merchandise (Inventory) | 2,114.50 | |
| Furniture and Fixtures (Inventory) | 2,000.00 | |
| Total Assets | $11,639.08 | |
| Liabilities | ||
| Personal Accounts (Ledger) | 2,828.50 | |
| Present Worth | 8,810.58 | |
The capital accounts of the partners show the original investment to have been $9,000.00, which is more than the present worth. Deducting the latter from the former will give the net loss.
| Investment | $9,000.00 |
| Present Worth | 8,810.58 |
| Net Loss | 189.42 |
The partnership agreement provides that profits and losses are to be shared equally, but contains no reference to the payment of interest on withdrawals, or allowance of interest on personal credits.