Norr and Caylor Established a Partnership on January 1, 2020

question 53

Essay

Norr and Caylor established a partnership on January 1, 2020.Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000.For both partners, the beginning capital balance was to equal the initial investment.Norr and Caylor agreed to the following procedure for sharing profits and losses:- 12% interest on the yearly beginning capital balance- $10 per hour of work that can be billed to the partnership's clients- the remainder allocated ona 3:2 ratioThe Articles of Partnership specified that each partner should withdraw no more than $1,000 per month, which is accounted as direct reduction of that partner's capital balance.For 2020, the partnership's income was $70,000.Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours.In 2021, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively.Each partner withdrew $1,000 per month throughout 2020and 2021.Determine the balance in both capital accounts at the end of 2021to the nearest dollar.

---

Definitions:

Vocations

Refers to occupations, professions, or careers, particularly those for which individuals are trained or have a special aptitude.

Learning Disabilities

Learning disabilities are neurologically-based processing problems that can interfere with learning basic skills and higher level skills like organization and time planning.

Projective Tests

Psychological assessments that use ambiguous stimuli to elicit responses that reflect aspects of an individual's personality, motivations, or desires.

Psychopathology

The study of mental disorders, including their symptoms, etiologies (causes), and treatments.