1. A partnership begins its first year of operations with the following capital balances:

Alberta $100,000

Barcelona 150,000

Catalina.... 200,000

According to the articles of partnership, all profits will be assigned as follows:

• Annual compensation Barcelona is $10,000
• The interest of 10% of the beginning capital balance each year
• The remainder will be assigned on a 2:4:4 basis, respectively.
• Each partner is allowed to withdraw up to $12,000 per year.

The net income for the first year of operations was $150,000 and $180,000 for year two. Each partner withdraws the maximum amount from the business each year. Prepare the schedules (Allocation of Net Income and Statement of Capital) to determine the ending capital in the partners accounts.