Assuming that the net income is P50,000 and that each partner withdraws the maximum amount allowed, what is the balance in Cartwright’s capital account at the end of that year?A. P 105,800B. P 106,200C. P 106,900D. P 107,400 A partnership begins its first year with the following capital balances:Arthur, capitalBaxter, capitalCartwright, capitalP 60,00080,000100,000The articles of partnership stipulate that profits and losses be assigned in the following manner:Each partner is allocated interest equal to 10 percent of the beginning capital balance.Baxter is allocated compensation of P20,000 per year.Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.Each partner is allowed to withdraw up to P5,000 cash per year.

The partnership represents the business form that is conducted by two or more partners and shares…

Assuming that the net income is P50,000 and that each partner withdraws the maximum amount allowed, what is the balance in Cartwright’s capital account at the end of that year? A. P 105,800 B. P 106,200

Assuming that the net income is P50,000 and that each partner withdraws the maximum amount allowed, what is the balance in Cartwright’s capital account at the end of that year? A. P 105,800 B. P 106,200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Assuming that the net income is P50,000 and that each partner withdraws the maximum amount allowed, what is the balance in Cartwright’s capital account at the end of that year?
A. P 105,800

B. P 106,200

C. P 106,900

D. P 107,400

A partnership begins its first year with the following capital balances:
Arthur, capital
Baxter, capital
Cartwright, capital
P 60,000
80,000
100,000
The articles of partnership stipulate that profits and losses be assigned in the following manner:
Each partner is allocated interest equal to 10 percent of the beginning capital balance.
Baxter is allocated compensation of P20,000 per year.
Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
Each partner is allowed to withdraw up to P5,000 cash per year.

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