Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A partnership began its first year of operations with the following capital balances: Jeff, Capital: $150,000 Dan, Capital: $200,000 Matthew, Capital: $230,000 The Articles of

A partnership began its first year of operations with the following capital balances:

Jeff, Capital: $150,000

Dan, Capital: $200,000

Matthew, Capital: $230,000

The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Jeff, Dan and Matthew were to be awarded annual salaries of $25,000, $15 ,000 and $15,000, respectively. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. The remainder was to be assigned on a 6:2:2 basis to Jeff, Dan and Matthew, respectively. Each partner withdrew $10,000 per year. For the first year of operations the partnership earned net income of $158,000.

What are the balances in each partners capital account at the end of the first year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Managerial Accounting Version 3.0

Authors: Kurt Heisinger, Joe Ben Hoyle

1st Edition

1453399410, 9781453399415

More Books

Students also viewed these Accounting questions