Question
Alfred and Barne share profits and losses in a ratio of 2:3, respectively, after salary allowances, and interest allowances allocations. Alfred and Barne receive salary
Alfred and Barne share profits and losses in a ratio of 2:3, respectively, after salary allowances, and interest allowances allocations. Alfred and Barne receive salary allowances of $30,000 and $60,000, respectively, and both partners receive 10% interest based upon the balance in their capital accounts on January 1. Partners' drawings are not used in determining the average capital balances. Total net income for 2020 is $250,000.
Alfred | Barne | |
January 1 capital balances | $600,000 | $900,000 |
Yearly drawings ($3,000 a month) | 36,000 | 36,000 |
What will be the final amount of profit closed to each partner's capital account?
Group of answer choices
90,000 to Alfred and $150,000 to Barne
94,000 to Alfred and 156,000 to Barne
100,000 to Alfred and 150,000 to Barne
125,000 to Alfred and 125,000 to Barne
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