Partnerships (Appendix)
Karen Locke and Gina Keyes agreed to form a partnership to operate a sandwich shop. Karen contributed $35,000 cash and will manage the store. Gina contributed computer equipment worth $11,200 and $128,800 cash. Gina will keep the financial records. During the year, sales were $126,000 and expenses (including a salary for Karen) were $106,400. Karen withdrew $700 per month. Gina withdrew $5,600 (total). Their partnership agreement specified that Karen would receive a salary of $10,800 for the year. Gina would receive 6% interest on her 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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