Norr and Caylor established a partnership on January 1, 2010. Norr invested cash of $100,000 and Caylor
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$10 per hour of work that can be billed to the partnership's clients; and
The remainder divided in a 3:2 ratio.
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month.For 2010, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2011, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours, respectively. Each partner withdrew $1,000 per month throughout 2010 and 2011.
Required:(a) Determine the amount of net income allocated to each partner for 2010.
(b) Determine the balance in both capital accounts at the end of 2010.
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Related Book For
Intermediate Accounting
ISBN: 978-0324659139
11th edition
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
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