Help Save & Exit Su Required information A partnership began its first year of o

Question

Help Save & Exit Su Required information A partnership began its first year of operations with the following capital balances: oung, Capital: Eaton, Capital: Thurman,Capital: 143,000 $ 104,000 143,o00 The Articles of Partnership stipulated that profits and losses be assigned in the following manner . Young was to be awarded an annual salary of $26.000 and $13,000 salary was to be awarded to Thurman Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year The remainder was to be assigned on a 5:2:3 basis to Young. Eaton, and Thurman, respectively Each partner withdrew $13.000 per year Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year What was Thurman's total share of net income for the second year? 21 22 of 33 Next> C Prev 8 5 command

Explanation / Answer

Answer c. $19,760 Calculation of Capital Balance at the end of First Year: Young Capital Eaton Capital Thurman Capital Capital Introduced          143,000          104,000          143,000 Net Loss Distributed          (11,700)          (10,400)            (3,900) Withdrawl by Partners          (13,000)          (13,000)          (13,000) Ending Balance - First Year          118,300            80,600          126,100 Calculation of Net Loss distributed Between Partners - First Year: Young Capital Eaton Capital Thurman Capital Total Annual Salary            26,000                     -              13,000              39,000 Interest On Capital            14,300            10,400            14,300              39,000 Net Loss Distributed          (52,000)          (20,800)          (31,200)         (104,000) Total Amt. Distributed          (11,700)          (10,400)            (3,900)           (26,000) Distribution of Profits - Second Year Young Capital Eaton Capital Thurman Capital Total Annual Salary            26,000                     -              13,000              39,000 Interest on Capital            11,830              8,060            12,610              32,500 Balance Profit Distributed            (9,750)            (3,900)            (5,850)           (19,500) Total Amt. Distributed            28,080              4,160            19,760              52,000 Thurman Share - second Year - $19,760

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