FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Norr and Caylor established a
12% interest on the yearly beginning capital balance
$10 per hour of work that can be billed to the partnership's clients
the remainder divided in a 3:2 ratio
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month, which is accounted as direct reduction of that partner’s capital balance.
For 2019, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2020, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively. Each partner withdrew $1,000 per month throughout 2019 and 2020.
Complete the following:
Determine the amount of net income allocated to each partner for 2019.
Determine the balance in both capital accounts at the end of 2019.
Determine the amount of net income allocated to each partner for 2020. (Round all calculations to the nearest whole dollar).
Determine the balance in both capital accounts at the end of 2020 to the nearest dollar.
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