Table 12-13 Burns and Allan Have Formed a Partnership and Invested $40,000

question 130

Essay

Table 12-13
Burns and Allan have formed a partnership and invested $40,000 and $60,000, respectively. They have agreed to share profits as follows:
1) An annual allocation to Burns of $20,000 and to Allan of $10,000 based on service
2) The next $15,000 is to be allocated according to their original capital contributions to the partnership.
3) The remainder is to be allocated 5:4 respectively
-Refer to Table 12-13.Assuming that the business earns $135,000 and that each partner withdrew $1,000 per month during the year:
1_allocate the income to Burns and Allan.
2_calculate the balance of each partner's capital account.

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