Reference no: EM131759600
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2015, capital balances were as follows:
| Purkerson |
$ |
86,000 |
| Smith |
|
66,000 |
| Traynor |
|
30,000 |
Due to a cash shortage, Purkerson invests an additional $12,000 in the business on April 1, 2015.
Each partner is allowed to withdraw $900 cash each month.
The partners have used the same method of allocating profits and losses since the business's inception:
• Each partner is given the following compensation allowance for work done in the business: Purkerson, $10,000; Smith, $26,000; and Traynor, $6,000.
• Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings.
• Any remaining profit or loss is allocated 4:2:4 to Purkerson, Smith, and Traynor, respectively. The net income for 2015 is $28,000. Each partner withdraws the allotted amount each month.
What are the ending capital balances for 2015?
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