Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A partnership begins its first year with the following capital balances: Alexander, Capital $ 30,000 Bertrand, Capital 40,000 Coloma, Capital 50,000 The articles of partnership

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

Alexander, Capital $ 30,000
Bertrand, Capital 40,000
Coloma, Capital 50,000

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

  • Each partner is allocated interest equal to 5 percent of the beginning capital balance.
  • Bertrand is allocated compensation of $10,000 per year.
  • Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
  • Each partner is allowed to withdraw up to $3,000 cash per year.

Assuming that the net income is $40,000 and that each partner withdraws the maximum amount allowed, what is the balance in Coloma's capital account at the end of the year?

Multiple Choice

  • $59,100

  • $62,100

  • $51,900

  • $52,500

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

General Accounting Financial Accounting

Authors: Bbc Kikumbi Mwepu

1st Edition

6206329488, 978-6206329480

More Books

Students also viewed these Accounting questions

Question

What is electric dipole explain with example

Answered: 1 week ago

Question

What is polarization? Describe it with examples.

Answered: 1 week ago

Question

How can I or others help?

Answered: 1 week ago

Question

Which options are of interest to you?

Answered: 1 week ago

Question

How will you measure it?

Answered: 1 week ago