Question

A partnership begins its first year of operations with the following capital balances: Winston, Capital $...

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

Winston, Capital $ 86,000
Durham, Capital 76,000
Salem, Capital 86,000

According to the articles of partnership, all profits will be assigned as follows:

Winston will be awarded an annual salary of $10,000 with $5,000 assigned to Salem.

The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year.

The remainder will be assigned on a 5:2:3 basis, respectively.

Each partner is allowed to withdraw up to $7,000 per year.

The net loss for the first year of operations is $32,000 and net income for the subsequent year is $25,000. Each partner withdraws the maximum amount from the business each period. What is the balance in Winston’s capital account at the end of the second year?

Multiple Choice

A, $61,700

B, $70,870

C, $73,120

D, $66,120

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A partnership begins its first year of operations with the following capital balances: Winston, Capital $...
A partnership begins its first year of operations with the following capital balances: Winston, Capital $ 88,000 Durham, Capital 78,000 Salem, Capital 88,000 According to the articles of partnership, all profits will be assigned as follows: Winston will be awarded an annual salary of $12,000 with $6,000 assigned to Salem. The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:2:3...
A partnership began its first year of operations with the following capital balances; Neil Capital 143,000,...
A partnership began its first year of operations with the following capital balances; Neil Capital 143,000, Matthew 104,000, Vino Capital 143,000. The Articles of partnership stipulated that profits and losses be assigned in the following manner; Neil was to be awarded an annual salary of P26,000 with P13,000 salary assigned to Vino. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. The remainder was to be...
A partnership began its first year of operations with the following capital balances: Young, Capital $...
A partnership began its first year of operations with the following capital balances: Young, Capital $ 143,000 Eaton, Capital $ 104,000 Thurman, Capital $ 143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of...
A partnership begins its first year with the following capital balances: Alfred, Capital $ 32,000 Bernard,...
A partnership begins its first year with the following capital balances: Alfred, Capital $ 32,000 Bernard, Capital 42,000 Collins, Capital 52,000 The articles of partnership stipulate that profits and losses be assigned in the following manner: Each partner is allocated interest equal to 6 percent of the beginning capital balance. Bernard is allocated compensation of $12,000 per year. Any remaining profits and losses are allocated on a 3:3:4 basis, respectively. Each partner is allowed to withdraw up to $4,000 cash...
A partnership begins its first year with the following capital balances: Alfred, Capital $ 60,000 Bernard,...
A partnership begins its first year with the following capital balances: Alfred, Capital $ 60,000 Bernard, Capital 70,000 Collins, Capital 80,000 The articles of partnership stipulate that profits and losses be assigned in the following manner: Each partner is allocated interest equal to 5 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...
A partnership begins its first year with the following capital balances: Alfred, Capital $ 74,000 Bernard,...
A partnership begins its first year with the following capital balances: Alfred, Capital $ 74,000 Bernard, Capital 84,000 Collins, Capital 94,000 The articles of partnership stipulate that profits and losses be assigned in the following manner: Each partner is allocated interest equal to 7 percent of the beginning capital balance. Bernard is allocated compensation of $18,000 per year. Any remaining profits and losses are allocated on a 3:3:4 basis, respectively. Each partner is allowed to withdraw up to $6,000 cash...
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...
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...
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2018, capital balances were as follows: Purkerson $ 76,000 Smith 56,000 Traynor 30,000 Due to a cash shortage, Purkerson invests an additional $16,000 in the business on April 1, 2018. Each partner is allowed to withdraw $1,000 cash each month. The partners have used the same method of allocating profits and losses since the business's inception: Each partner is given...
The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $...
The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $ 150,000 Robbins, Capital 110,000 Prince is allocated 60 percent of all profits and losses with the remaining 40 percent assigned to Robbins after interest of 10 percent is given to each partner based on beginning capital balances. On January 2, 2018, Jeffrey invests $76,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT