Reference no: EM133170092

Question - Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year.

Because of prior work experience, Angela is entitled to an annual salary allowance of $12,500 per year, and Diaz is entitled to an annual salary allowance of $9,100 per year.

Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 30 percent; and Krause, 50 percent. If a net loss remains after the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 40 percent; and Krause, 30 percent.

Prepare a schedule that determines the ending capital balance for each partner as of the end of each of these three years.