Arlene, Paul and Jackson formed a limited liability partnership in 2019. In 2020, the beginning capital balance of each partner was $25,000, $37,500 and $62,500 respectively. During 2020, the company earned a net income of $60,000, and Arlene withdrew $29,000 while Paul and Jackson withdrew $39,000 and $36,000 respectively
Arlene, Paul and Jackson formed a limited liability partnership in 2019. In 2020, the beginning capital balance of each partner was $25,000, $37,500 and $62,500 respectively. During 2020, the company earned a net income of $60,000, and Arlene withdrew $29,000 while Paul and Jackson withdrew $39,000 and $36,000 respectively
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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C4.4
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Arlene, Paul and Jackson formed a limited liability partnership in 2019. In
2020, the beginning capital balance of each partner was $25,000, $37,500
and $62,500 respectively. During 2020, the company earned a net income of
$60,000, and Arlene withdrew $29,000 while Paul and Jackson withdrew
$39,000 and $36,000 respectively
a) Calculate the amount of net income each partner will receive based on the
following independent scenarios.
(i) the earnings are divided equally.
(ii) Arlene receives 25%, Paul receives 39%, and Jackson receives 36% of
the earnings.
(iii) the earnings are divided based on the partner's capital balance at the
beginning of the year.
Do not enter dollar signs or commas in the input boxes.
Round your answers to the nearest whole number.
Do not use the negative sign.
(i)
(ii)
(iii)
Arlene
Paul
Jackson
b) Calculate the ending capital balance of each partner, assuming that
method (ii) is used to divide earnings.
Arlene
Paul
Jackson
Beginning Capital
Balance
Add: Share of net income
Subtotal
Less: Withdrawals
Ending Capital Balance
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