Greta,Harriet,and Ivy Have a Retail Partnership Business Selling Personal Computers

question 50

Essay

Greta,Harriet,and Ivy have a retail partnership business selling personal computers.The partners are allowed an interest allocation of 6% on their average capital.Capital account balances on the first day of each month are used in determining weighted average capital,regardless of additional partner investment or withdrawal transactions during any given month.Withdrawals of capital that are debited to the capital account are used in the average calculation.Partner capital activity for the year was:
Required:
Calculate weighted average capital for each partner,and determine the amount of interest that each partner will be allocated.Round all calculations to the nearest whole dollar.

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Definitions:

Statement of Cash Flows

A financial report that provides aggregated data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Operating activities involve the primary day-to-day functions of a business related to producing and selling its goods and/or services, reflected in the cash flow statement.

Investing Activities

Transactions involving the purchase or sale of long-term assets and other investments not considered cash equivalents.

Financing Activities

involve transactions related to raising capital and repaying investors, including issuing equity, obtaining loans, and paying dividends.