Reference no: EM13775566
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; and - 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.
Required:
1. Determine the amount of net income allocated to each partner for 2011. ( Round all calculations to the nearest whole dollar)
2. Determine the balance in both capital accounts at the end of 2011 to the nearest dollar.
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: 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 wa..
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