A partnership begins its first year with the following capital balances: Alfred, Capital $ 76,000 Bernard, Capital
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Question:
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
Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: 978-0078025822
17th edition
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson
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