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Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910 Exercise 2
A partnership begins its first year with the following capital balances: 
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 $20,000 per year.
• Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
• Each partner is allowed to withdraw up to $5,000 cash per year.
Assuming that the net income is $50,000 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.$105,800.
b.$106,200.
c.$106,900.
d.$107,400.
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 $20,000 per year.
• Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
• Each partner is allowed to withdraw up to $5,000 cash per year.
Assuming that the net income is $50,000 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.$105,800.
b.$106,200.
c.$106,900.
d.$107,400.
Explanation
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Arthur ...
Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
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