Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Alford, Beeson, and Carlton have operated a coffee shop for a number of years as a partnership. At the beginning of 2024, capital balances
Alford, Beeson, and Carlton have operated a coffee shop for a number of years as a partnership. At the beginning of 2024, capital balances were as follows: Alford Beeson Carlton $ 94,000 74,000 20,000 Due to a cash shortage. Alford invests an additional $10,000 in the business on April 1, 2024. Each partner is allowed to withdraw $600 cash each month. The partners have used the same method of allocating profits and losses since the business's inception: Each partner is given the following compensation allowance for work done in the business: Alford, $14,000; Beeson, $30,000; and Carlton, $4,000. Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings. Any remaining profit or loss is allocated 5:3:2 to Alford, Beeson, and Carlton, respectively. The net income for 2024 is $27,000. Each partner withdraws the allotted amount each month. Required: Prepare a schedule showing calculations for the partners' 2024 ending capital balances. Note: Amounts to be deducted should be indicated with minus sign.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started