Question
In: Accounting
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2018, capital balances were as follows:
| Purkerson | $ | 90,000 |
| Smith | 70,000 | |
| Traynor | 30,000 | |
Due to a cash shortage, Purkerson invests an additional $16,000 in the business on April 1, 2018.
Each partner is allowed to withdraw $1,000 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, $12,000; Smith, $28,000; and Traynor, $8,000.
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 3:3:4 to Purkerson, Smith, and Traynor, respectively. The net income for 2018 is $32,000. Each partner withdraws the allotted amount each month.
What are the ending capital balances for 2018?
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Solutions
ekkarill92 answered 1 year agoRelated Solutions
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a
number of years as a partnership. At the beginning of 2021, capital
balances were as follows:
Purkerson
$
60,000
Smith
40,000
Traynor
20,000
Due to a cash shortage, Purkerson invests an additional $14,000
in the business on April 1, 2021.
Each partner is allowed to withdraw $1,000 cash each month.
The partners have used the same method of allocating profits and
losses since the business's inception:
Each partner is given...
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a
number of years as a partnership. At the beginning of 2018, capital
balances were as follows:
Purkerson
$
62,000
Smith
42,000
Traynor
20,000
Due to a cash shortage, Purkerson invests an additional $16,000
in the business on April 1, 2018.
Each partner is allowed to withdraw $1,000 cash each month.
The partners have used the same method of allocating profits and
losses since the business's inception:
Each partner is given...
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a
number of years as a partnership. At the beginning of 2018, capital
balances were as follows:
Purkerson
$
86,000
Smith
66,000
Traynor
30,000
Due to a cash shortage, Purkerson invests an additional $12,000
in the business on April 1, 2018.
Each partner is allowed to withdraw $900 cash each month.
The partners have used the same method of allocating profits and
losses since the business's inception:
Each partner is given...
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a
number of years as a partnership. At the beginning of 2018, capital
balances were as follows:
Purkerson
$
96,000
Smith
76,000
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...
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a
number of years as a partnership. At the beginning of 2018, capital
balances were as follows:
Purkerson
$
60,000
Smith
40,000
Traynor
20,000
Due to a cash shortage, Purkerson invests an additional $8,000
in the business on April 1, 2018.
Each partner is allowed to withdraw $1,000 cash each month.
The partners have used the same method of allocating profits and
losses since the business's inception:
Each partner is given...
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership....
Purkerson, Smith, and Traynor have operated a bookstore for a
number of years as a partnership. At the beginning of 2018, capital
balances were as follows:
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...
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...
March, April, and May have been in partnership for a number of years.
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2:2 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash Ș 35,000 Liabilities ...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of
years. The partners allocate all profits and losses on a 2:3:1
basis, respectively. Recently, each partner has become personally
insolvent and, thus, the partners have decided to liquidate the
business in hopes of remedying their personal financial problems.
As of September 1, the partnership’s balance sheet is as
follows:
Cash
$
30,000
Liabilities
$
119,000
Accounts receivable
122,000
March, capital
42,000
Inventory
99,000
April, capital
94,000
Land, building,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of
years. The partners allocate all profits and losses on a 4:2:2
basis, respectively. Recently, each partner has become personally
insolvent and, thus, the partners have decided to liquidate the
business in hopes of remedying their personal financial problems.
As of September 1, the partnership’s balance sheet is as
follows:
Cash
$
17,000
Liabilities
$
53,000
Accounts receivable
87,000
March, capital
34,000
Inventory
86,000
April, capital
81,000
Land, building,...
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