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What is the capital balance of King on December

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Question - The Statement of Comprehensive Income of King and Queen Partnership for the year ended December 31, 2020 show a net income of 80,000. The capital accounts of the partners for 2020 shows the following:

I. King began the year with a capital balance of 40,000.

II. Queen began the year with a capital balance of 100,000.

III. On April 1, 2020, King invested an additional 15,000 into the partnership.

IV. On August 1, 2020, Queen invested an additional 30,000 into the partnership.

V. Throughout 2020, each partner withdrew 400 per week (for 52 weeks a year) in anticipation of partnership income.

King and Queen have agreed to distribute partnership net income according to the following plan:

King Queen

Interest on weighted average capital 10% 10%

Bonuses on net income before salaries but after interest and bonuses 25% None

Salaries - Annual 25,000 30,000

Remaining (if positive) 70% 30%

Remaining (if negative) 50% 50%

Required -

1. What is the capital balance of King on December 31, 2020?

2. What is the capital balance of Queen on December 31, 2020?

Reference no: EM132816511

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