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Question - On February 1, 2021, Flores, Gilroy, and Hansen began a partnership in which Flores and Hansen contributed cash of $25,000; Gilroy contribute property with a fair value of $50,000 and a tax basis $40,000. Gilroy receives a 5% bonus of partnership income. Flores and Hansen receive salaries of $10,000 each. The partnership agreement of Flores, Gilroy, and Hansen provides all partners to receive a 5% interest on capital and that profits and losses be divided of the remaining income be distributed to Flores, Gilroy, and Hansen by a 1:3:1 ratio.
Required -
a. Prepare a schedule to distribute $25,000 of partnership net income to the partners.
b. Compute the ending capital balances for each partner.
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