Assume that Partner C's capital balance at the beginning of 2021 was $70,000. During 2021, Partner C withdrew $7.000 in cash for personal use. According to the partnership agreement, drawings in excess of $5,000 are charged to (i.e., debited to) the partner's capital immediately. Calculate Partner C's interest on capital for 2021 assuming that interest on capital is calculated at 10% of the ending capital balance before closing drawings.
Assume that Partner C's capital balance at the beginning of 2021 was $70,000. During 2021, Partner C withdrew $7.000 in cash for personal use. According to the partnership agreement, drawings in excess of $5,000 are charged to (i.e., debited to) the partner's capital immediately. Calculate Partner C's interest on capital for 2021 assuming that interest on capital is calculated at 10% of the ending capital balance before closing drawings.
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 58P
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Transcribed Image Text:Assume that Partner C's capital balance at the beginning of
2021 was $70,000. During 2021, Partner C withdrew $7,000 in
cash for personal use. According to the partnership agreement,
drawings in excess of $5,000 are charged to (i.e., debited to) the
partner's capital immediately. Calculate Partner C's interest on
capital for 2021 assuming that interest on capital is calculated at
10% of the ending capital balance before closing drawings.
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