Capital balance represents each partners initial capital

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At the end of its first year of operations on December 31, 2017, NBS Company's accounts show the following.

Partner Drawings Capital
Art Niensted
$23,100 $48,100
Greg Bolen
13,800 39,500
Krista Sayler
11,300

24,500


The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2017 has not been closed to the partners' capital accounts.

1) Net income is $31,000. Income is shared 6 : 3 : 1.

2) Net income is $41,500. Niensted and Bolen are given salary allowances of $15,400 and $10,800, respectively. The remainder is shared equally.

3) Net income is $18,200. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $12,990 salary allowance. The remainder is shared equally.

Reference no: EM131765993

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