Question

A partnership begins its first year with the following capital balances: Alfred, Capital $ 36,000 Bernard,...

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

Alfred, Capital $ 36,000
Bernard, Capital 46,000
Collins, Capital 56,000

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 $16,000 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 $46,000 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

A, $57,376

B, $68,064

C, $63,064

D, $60,480

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