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Need answers for this question. Thank you Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the
Need answers for this question. Thank you
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2021 , capital balances were as follows: Due to a cash shortage, Purkerson invests an additional $14,000 in the business on April 1, 2021. Each partner is allowed to withdraw $1,000 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: Purkerson, $11,000; Smith, $27,000; and Traynor, $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 4:3:3 to Purkerson, Smith, and Traynor, respectively. The net income for 2021 is $30,000. Each partner withdraws the allotted amount each month. Prepare a schedule showing calculations for the partners' 2021 ending capital balances. (Amounts to be deducted should be indicated with minus sign.)Step by Step Solution
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