Cline, Watters, and Nettles formed a partnership on January 1, 20X1, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) an interest of 10% of the beginning capital balance each year; (2) an annual compensation of $10,000 to Watter; and (3) sharing the remainder of the income or loss in a ratio of 20% for Cline and 40% each for Watters and Nettles. Net income was $150,000 in 20X1 and $180,000 in 20X2. Each partner withdrew $1,000 for personal use every month during 20X1 and 20X2. What was Watters's capital balance at the end of 20X1? Group of answer choices $150,000 $160,000 $165,000 $201,000 $213,000
Cline, Watters, and Nettles formed a partnership on January 1, 20X1, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) an interest of 10% of the beginning capital balance each year; (2) an annual compensation of $10,000 to Watter; and (3) sharing the remainder of the income or loss in a ratio of 20% for Cline and 40% each for Watters and Nettles. Net income was $150,000 in 20X1 and $180,000 in 20X2. Each partner withdrew $1,000 for personal use every month during 20X1 and 20X2. What was Watters's capital balance at the end of 20X1? Group of answer choices $150,000 $160,000 $165,000 $201,000 $213,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
(TCO G) Cline, Watters, and Nettles formed a partnership on January 1, 20X1, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to
(1) an interest of 10% of the beginning capital balance each year;
(2) an annual compensation of $10,000 to Watter; and
(3) sharing the remainder of the income or loss in a ratio of 20% for Cline and 40% each for Watters and Nettles.
Net income was $150,000 in 20X1 and $180,000 in 20X2. Each partner withdrew $1,000 for personal use every month during 20X1 and 20X2.
What was Watters's capital balance at the end of 20X1?
(1) an interest of 10% of the beginning capital balance each year;
(2) an annual compensation of $10,000 to Watter; and
(3) sharing the remainder of the income or loss in a ratio of 20% for Cline and 40% each for Watters and Nettles.
Net income was $150,000 in 20X1 and $180,000 in 20X2. Each partner withdrew $1,000 for personal use every month during 20X1 and 20X2.
What was Watters's capital balance at the end of 20X1?
Group of answer choices
$150,000
$160,000
$165,000
$201,000
$213,000
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