Blue and Green formed a partnership in 20X4. The partnership agreement provides for annual salary allowances of

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Blue and Green formed a partnership in 20X4. The partnership agreement provides for annual salary allowances of $55,000 for Blue and $45,000 for Green. The partners share profits equally and losses in a 60:40 ratio, respectively. The partnership had earnings of $80,000 for 20X5 before any allowance to partners. What amount of these earnings should be credited to each partner’s capital account?

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Advanced Financial Accounting

ISBN: 9781260165111

12th Edition

Authors: Theodore Christensen, David Cottrell, Cassy Budd

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