Question

Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2011, capital balances were as follows:
Due to a cash shortage, Purkerson invests an additional $8,000 in the business on April 1, 2011.
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, $18,000; Smith, $25,000; and Traynor, $8,000.
• Each partner is credited with interest equal to 10 percent of the average monthly capital balance for the year without regard for normal drawings.
• Any remaining profit or loss is allocated 4:2:4 to Purkerson, Smith, and Traynor, respectively.
The net income for 2011 is $23,600. Each partner withdraws the allotted amount each month.
What are the ending capital balances for 2011?




$1.99
Sales8
Views408
Comments0
  • CreatedOctober 04, 2014
  • Files Included
Post your question
5000