The partnership of Gary, Jerome and Paul was formed on January 1, 2019 with original investments of 80,000, 120,000 and 180,000, respectively. According to the partnership agreement, profits and losses shall be divided among the partners as follows: Salaries of 12,000 for Gary, 10,000 for Jerome, and 8,000 for Paul. Interest of 8% on the average capital balance during the year. The remainder, if any, shall be divided by the partners equally. Additional information is as follows: Net income of the partnership for the year ended December 31, 2019 was 70,000. Gary invested an additional 20,000 in the partnership on July 1, 2019. Paul withdrew 30,000 from the partnership on October 1, 2019. Gary, Jerome and Paul made regular drawings against their share of net income during 2019 of 10,000 each. Compute for each partner’s capital balance as of December 31, 2019.
The partnership of Gary, Jerome and Paul was formed on January 1, 2019 with original investments of 80,000, 120,000 and 180,000, respectively. According to the partnership agreement, profits and losses shall be divided among the partners as follows: Salaries of 12,000 for Gary, 10,000 for Jerome, and 8,000 for Paul. Interest of 8% on the average capital balance during the year. The remainder, if any, shall be divided by the partners equally. Additional information is as follows: Net income of the partnership for the year ended December 31, 2019 was 70,000. Gary invested an additional 20,000 in the partnership on July 1, 2019. Paul withdrew 30,000 from the partnership on October 1, 2019. Gary, Jerome and Paul made regular drawings against their share of net income during 2019 of 10,000 each. Compute for each partner’s capital balance as of December 31, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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partnership of Gary, Jerome and Paul was formed on January 1, 2019 with original investments of 80,000, 120,000 and 180,000, respectively. According to the partnership agreement,profits and losses shall be divided among the partners as follows: - Salaries of 12,000 for Gary, 10,000 for Jerome, and 8,000 for Paul.
- Interest of 8% on the average capital balance during the year.
- The remainder, if any, shall be divided by the partners equally.
Additional information is as follows:
- Net income of the partnership for the year ended December 31, 2019 was 70,000.
- Gary invested an additional 20,000 in the partnership on July 1, 2019.
- Paul withdrew 30,000 from the partnership on October 1, 2019.
- Gary, Jerome and Paul made regular drawings against their share of net income during 2019 of 10,000 each.
Compute for each partner’s capital balance as of December 31, 2019.
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