A partnership has the following capital balances: Allen, Capital . . . . . . . .
Question:
A partnership has the following capital balances:
Allen, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000
Burns, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Costello, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
Profits and losses are split as follows: Allen (20 percent), Burns (30 percent), and Costello (50 percent). Costello wants to leave the partnership and is paid $100,000 from the business based on provisions in the articles of partnership. If the partnership uses the bonus method, what is the balance of Burns’s capital account after Costello withdraws?
a. $24,000
b. $27,000
c. $33,000
d. $36,000
Step by Step Answer:
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni