Whitman and Greene are partners in a real estate venture. At January l, 2014, their respective capital balances were $134,000 and $160,000. Their partnership agreement provides that Whitman is to receive a guaranteed salary of $65,000, and that remaining profits after the salary are to be shared equally. Partnership operations for the year 2014 resulted in a net income of $44,000. Whitman's salary is paid in cash during the year, but there are no other withdrawals or capital changes. Assume full implementation.
Required
a. Compute the balance of each partner's capital account at December 31, 2014.
b. Compute the balance of each partner's capital account at December 31, 2014, assuming partnership net income was $88,000.