Answered step by step
Verified Expert Solution
Question
1 Approved Answer
2.) The Crump Company is organized as a partnership and has 5 partners (A,B,C,D and E). At the beginning of 2017 they have capital balances
2.) The Crump Company is organized as a partnership and has 5 partners (A,B,C,D and E). At the beginning of 2017 they have capital balances as follows: A $ 25,000 $ 32,000 $ 17,000 $50,000 E $27,000 The partnership agreement provides the following: a.) Interest will be credited to each partner at the rate of 8% per year on their average capital balance without regard for normal drawings. b.) Each partner can withdraw $ 500 cash per month. c.) Partners A, B and C receive compensation allowances as follows: A-$ 10,000, B- $ 12,000 and C- $ 15,000. Partners D and Eare" non-working" partners and thus do not receive d.) Remaining profits after interest and compensation is allocated as follows: A- 15 %, B- 20 %, C-30%, D-10 % and E-25%. Results of 2017 reveal the following: Net income for 2017 was $ 200,000 Because of a need for additional capital, each partner contributed their proportionate share, based on profit sharing percentages, on June 30th, 2017. The total contributed was $ 100,000 Partners A and E withdrew $ 10,000 over their allowed amount on September 30th, 2017. Compute the ending capital balance of the partnership AND each partner on December 31, 2017. 15 points
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started