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2 - 4 . Norr and Caylor established a partnership on January 1 , 2 0 1 9 . Norr invested cash of $ 1

2-4. Norr and Caylor established a partnership on January 1,2019. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses:
o 12% interest on the yearly beginning capital balance
o $10 per hour of work that can be billed to the partnership's clients
o the remainder divided in a 3:2 ratio
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month, which is accounted as direct reduction of that partners capital balance.
For 2019, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2020, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively. Each partner withdrew $1,000 per month throughout 2019 and 2020.
o Determine the balance in both capital accounts at the end of 2020 to the nearest dollar.

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