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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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