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In: Accounting

Purkerson $ 82,000 Smith 62,000 Traynor 30,000 Due to a cash shortage, Purkerson invests an additional...

Purkerson $ 82,000
Smith 62,000
Traynor 30,000

Due to a cash shortage, Purkerson invests an additional $6,000 in the business on April 1, 2018.

Each partner is allowed to withdraw $700 cash each month.

The partners have used the same method of allocating profits and losses since the business's inception:

  • Each partner is given the following compensation allowance for work done in the business: Purkerson, $14,000; Smith, $24,000; and Traynor, $4,000.
  • Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings.
  • Any remaining profit or loss is allocated 3:2:5 to Purkerson, Smith, and Traynor, respectively. The net income for 2018 is $24,000. Each partner withdraws the allotted amount each month.

What are the ending capital balances for 2018?

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ekkarill92 answered 1 year ago
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