ges: Able Capital $ 60,000 (20%) Green Capital $80,000 (30%) Frank Capital $ 100,000 (50%) Each partner is allocated interest of 5% on beginning capital balances. Green is allocated salary of $20,000 for the full year. Frank is allocated salary of $10,000 for the full year. Able is not allocated salary. Each partner has drawings of $30,000 in the first year. Assume that partnership net income in the first
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
AGF partnership begins its first year of operation with the following capital balances and
Able Capital $ 60,000 (20%)
Green Capital $80,000 (30%)
Frank Capital $ 100,000 (50%)
Each partner is allocated interest of 5% on beginning capital balances.
Green is allocated salary of $20,000 for the full year. Frank is allocated salary of $10,000 for the full year. Able is not allocated salary.
Each partner has drawings of $30,000 in the first year.
Assume that partnership net income in the first year is $300,000. What is the balance in Green’s capital account at the end of the year
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a. |
$104,400 |
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b. |
$151,400 |
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c. |
$181,400 |
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d. |
$77,400 |
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|
e. |
$154,400
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