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A partnership begins its first year with the following capital balances: Alfred, Capital $ 74,000 Bernard, Capital 84,000 Collins, Capital 94,000 The articles of partnership
A partnership begins its first year with the following capital balances:
Alfred, Capital | $ | 74,000 |
Bernard, Capital | 84,000 | |
Collins, Capital | 94,000 | |
The articles of partnership stipulate that profits and losses be assigned in the following manner:
- Each partner is allocated interest equal to 7 percent of the beginning capital balance.
- Bernard is allocated compensation of $18,000 per year.
- Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
- Each partner is allowed to withdraw up to $6,000 cash per year.
Assuming that the net income is $84,000 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
a) $100,580
B) $99,416
C) $113,924
D) $119,924
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