Norr and Caylor Established a Partnership on January 1, 2010

question 13

Essay

Norr and Caylor established a partnership on January 1, 2010. 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 divided in a 3:2 ratio
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month.
For 2010, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2011, 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 2010 and 2011.
-Determine the balance in both capital accounts at the end of 2010.

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Definitions:

Efferent Arterioles

Small blood vessels that are part of the kidney's microcirculation, carrying blood away from the glomeruli toward the vasa recta.

Afferent Arterioles

Afferent arterioles are small blood vessels that carry blood towards the glomeruli of the kidney, playing a key role in the regulation of blood pressure and filtration rate.

Osmoregulation

The process by which living organisms control the concentration of water and solutes within their bodies to maintain homeostasis.

Freshwater Fish

Fish species that spend most or all of their lives in freshwater environments like rivers and lakes, as opposed to saltwater habitats.