Partnerships (Appendix)
Kirin Nerise and Milt O’Brien agreed to form a partnership to operate a sandwich shop. Kirin contributed $25,000 cash and will manage the store. Milt contributed computer equipment worth $8,000 and $92,000 cash. Milt will keep the financial records. During the year, sales were $90,000 and expenses (including a salary to Kirin) were $76,000. Kirin withdrew $500 per month. Milt withdrew $4,000 (total). Their partnership agreement specified that Kirin would receive a salary of $7,200 for the year. Milt would receive 6% interest on his initial capital investment. All remaining income or loss would be equally divided.
Required
Calculate the ending balance in each partner’s equity account.
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