Alford, Beeson, and Carlton have operated a coffee shop for a number of years as a partnership. At the beginning of 2024, capital balances were as follows: Alford Beeson Carlton $ 54,000 34,000 15,000 Due to a cash shortage, Alford invests an additional $6,000 in the business on April 1, 2024. 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: Alford, $12,000; Beeson, $22,000; and Carlton, $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 3:2:5 to Alford, Beeson, and Carlton, respectively. The net income for 2024 is $29,000. Each partner withdraws the allotted amount each month. Required: Prepare a schedule showing calculations for the partners' 2024 ending capital balances. Note: Amounts to be deducted should be indicated with minus sign. Beginning balances Additional contribution Answer is complete but not entirely correct. ALFORD, BEESON, and CARLTON Statement of Partners' Capital For the Year Ending December 31, 2024 Alford Beeson Carlton Totals $ 54,000 $ 34,000 $ 15,000 $ 103,000 6,000 0 Net income 8,336x Drawings (8,400) Ending capital balances $ 59,936 $ 19,492 x (8,400) 45,092 $ 0 1,172 6,000 29,000 (8,400) (25,200) 7,772 $ 112,800
Alford, Beeson, and Carlton have operated a coffee shop for a number of years as a partnership. At the beginning of 2024, capital balances were as follows: Alford Beeson Carlton $ 54,000 34,000 15,000 Due to a cash shortage, Alford invests an additional $6,000 in the business on April 1, 2024. 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: Alford, $12,000; Beeson, $22,000; and Carlton, $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 3:2:5 to Alford, Beeson, and Carlton, respectively. The net income for 2024 is $29,000. Each partner withdraws the allotted amount each month. Required: Prepare a schedule showing calculations for the partners' 2024 ending capital balances. Note: Amounts to be deducted should be indicated with minus sign. Beginning balances Additional contribution Answer is complete but not entirely correct. ALFORD, BEESON, and CARLTON Statement of Partners' Capital For the Year Ending December 31, 2024 Alford Beeson Carlton Totals $ 54,000 $ 34,000 $ 15,000 $ 103,000 6,000 0 Net income 8,336x Drawings (8,400) Ending capital balances $ 59,936 $ 19,492 x (8,400) 45,092 $ 0 1,172 6,000 29,000 (8,400) (25,200) 7,772 $ 112,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
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Transcribed Image Text:Alford, Beeson, and Carlton have operated a coffee shop for a number of years as a partnership. At the beginning of 2024, capital
balances were as follows:
Alford
Beeson
Carlton
$ 54,000
34,000
15,000
Due to a cash shortage, Alford invests an additional $6,000 in the business on April 1, 2024.
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: Alford, $12,000; Beeson, $22,000; and
Carlton, $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 3:2:5 to Alford, Beeson, and Carlton, respectively. The net income for 2024 is $29,000.
Each partner withdraws the allotted amount each month.
Required:
Prepare a schedule showing calculations for the partners' 2024 ending capital balances.
Note: Amounts to be deducted should be indicated with minus sign.
Beginning balances
Additional contribution
Answer is complete but not entirely correct.
ALFORD, BEESON, and CARLTON
Statement of Partners' Capital
For the Year Ending December 31, 2024
Alford
Beeson
Carlton
Totals
$
54,000 $
34,000
$
15,000
$ 103,000
6,000
0
Net income
8,336x
Drawings
(8,400)
Ending capital balances
$
59,936 $
19,492 x
(8,400)
45,092 $
0
1,172
6,000
29,000
(8,400)
(25,200)
7,772 $ 112,800
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