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A partnership begins its first year with the following capital balances: Alfred, Capital $ 32,000 Bernard, Capital 42,000 Collins, Capital 52,000 The articles of partnership

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

Alfred, Capital $ 32,000
Bernard, Capital 42,000
Collins, Capital 52,000

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

  • Each partner is allocated interest equal to 6 percent of the beginning capital balance.
  • Bernard is allocated compensation of $12,000 per year.
  • Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
  • Each partner is allowed to withdraw up to $4,000 cash per year.

Assuming that the net income is $42,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year?

Multiple Choice

  • $60,096

  • $53,364

  • $64,096

  • $55,120

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