10. A partnership begins its first year with the following capital balances:

Alfred, Capital..$50,000

Bernard, Capital..$60,000

Collins, Capital..$70,000

The articles of partnership stipulate that profits and losses be assigned in the following manner.

• Each partner is allocated interest equal to 5% of the beginning capital balance.
• Bernard is allocated compensation of $18,000 per year.
• Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
• Each partner is allowed to withdraw up to $5,000 cash per year.

Assuming that the net income is $60,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year?

a. $70,800

b. $86,700

c. $73,500

d. $81,700