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Question: A partnership begins its first year with


A partnership begins its first year with the following capital balances:



A partnership begins its first year with the following capital balances:-1

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.
∙ Bertrand is allocated compensation of $45,000 per year.
∙ Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
∙ Each partner is allowed to withdraw up to $25,000 cash per year.
Assuming that the net income is $115,000 and that each partner withdraws the maximum amount allowed, what is the balance in Coloma’s capital account at the end of the year?
a. $143,000
b. $135,000
c. $168,000
d. $164,000

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