A partnership begins its first year with the following capital balances:

Alfred, Capital	$	76,000
Bernard, Capital		86,000
Collins, Capital		96,000

The articles of partnership stipulate that profits and losses be assigned in the following manner:

• Each partner is allocated interest equal to 8 percent of the beginning capital balance.
• Bernard is allocated compensation of $20,000 per year.
• Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
• Each partner is allowed to withdraw up to $5,000 cash per year.

Assuming that the net income is $86,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year?

Multiple Choice

• $121,824

• $103,680

• $103,216

• $116,824

Answer rating: 100% (QA)

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