Assume that there are three partners in a partnership, A, B, and C. Partners A and...
Assume that there are three partners in a partnership, A, B, and
C. Partners A and B each began
the year with a capital account of $900,000. Partner C was admitted
to the partnership during the
year with a capital contribution of $630,000. The Partnership
Agreement provides for a salary to
Partner C of $90,000 and interest on the respective Capital
Accounts of
$45,000/$45,000/$23,625, respectively. During the year, the
partners withdrew
$36,000/$36,000/$21,000 and the allocation of profit was
$207,900/$207,900/$121,275,
respectively
Prepare the Statement of Partners’ Capital for the year. Please provide explanation for each calculation
Homework Answers
| All Amounts in $ | ||||
| A | B | C | Total | |
| Statement of Partners' Capital | ||||
| Capital account, beginning of year | 900000 | 900000 | 1800000 | |
| Capital contributions | 630000 | 630000 | ||
| Withdrawals | -36000 | -36000 | -21000 | 93000 |
| Salary | 90000 | 90000 | ||
| Interest | 45000 | 45000 | 23625 | 123625 |
| Allocation of remaining profit | 207900 | 207900 | 121275 | 537075 |
| Closing Balance in Capital Account | 1116900 | 1116900 | 843900 | 3077700 |
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