Beginning balancesAdditional contributionNet incomeDrawingsEnding capital balancesPURKERSON, SMITH, and TRAYNORStatement of Partners' CapitalFor the Year Ending December 31, 2021PurkersonSmith$0 $0 $Traynor$GA0 $Totals00000 Purkerson, Smith, and Traynor have operated a bookstore for a number of years as apartnership. At the beginning of 2021, capital balances were as follows: Purkerson $ 96,000Smith 76,000 Traynor 30, 000 Due to a cash shortage, Purkerson invests an additional $6,000in the business on April 1, 2021. 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'sinception: Each partner is given the following compensation allowance for work done in thebusiness: Purkerson, $15,000; Smith, $25,000; and Traynor, $8,000. Each partner is creditedwith interest equal to 20 percent of the average monthly capital balance for the year withoutregard for normal drawings. Any remaining profit or loss is allocated 4:2:4 to Purkerson,Smith, and Traynor, respectively. The net income for 2021 is $29,000. Each partnerwithdraws the allotted amount each month. Prepare a schedule showing calculations for thepartners' 2021 ending capital balances. (Amounts to be deducted should be indicated withminus sign.)

A partnership is a business structure where two or more individuals share ownership and management…

Beginning balances Additional contribution Net income Drawings Ending capital balances PURKERSON, SMITH, and TRAYNOR Statement of Partners' Capital For the Year Ending December 31, 2021 Purkerson Smith $ 0 $ 0 $ Traynor 0 $ $ Totals 0 0 0 0 0

Beginning balances Additional contribution Net income Drawings Ending capital balances PURKERSON, SMITH, and TRAYNOR Statement of Partners' Capital For the Year Ending December 31, 2021 Purkerson Smith $ 0 $ 0 $ Traynor 0 $ $ Totals 0 0 0 0 0

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 3PA

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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 Smith Traynor ● 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: $ 88,000 68,000 20,000 Each partner is given the following compensation allowance for work done in the business: Purkerson, $11,000; Smith, $27,000; 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 4:3:3 to Purkerson, Smith, and Traynor, respectively. The net income for 2021 is $30,000. Each partner withdraws the allotted amount each month. Prepare a schedule showing calculations for the…
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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: 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 the following compensation allowance for work done in the business: Purkerson, $18,000; Smith, $25,000; and Traynor, $8,000. Each partner is credited with interest equal to 10 percent of the average monthly capital balance for the year without regard for normal drawings. Any remaining profit or loss is allocated 4:2:4 to Purkerson, Smith, and Traynor, respectively. The net income for 2018 is $23,600. Each partner withdraws the allotted amount each month. What are the ending capital balances for 2018?
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