A partnership begins its first year with the following capital balances: ...
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Accounting
A partnership begins its first year with the following capital balances:
Alfred, Capital
$
40,000
Bernard, Capital
50,000
Collins, Capital
60,000
The articles of partnership stipulate that profits and losses be assigned in the following manner:
Each partner is allocated interest equal to 5 percent of the beginning capital balance.
Bernard 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 $4,000 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 Collins capital account at the end of that year?
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