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General Accounting Discussions: Partnerships and allocation to each partner

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    • CommentAuthorjahubbard
    • CommentTimeFeb 2nd 2008
     
    Hello, this is my first time to this site, I hope someone can help me. I've tried to solve this problem, but as simple as it looks the more confused I get. Here we go,
    M and C are partners. At the beginning of the current year, M's capital account is $ 30,000 and C's is $ 50,000. M and C decided to allocate income with 10% interest on capital balances at the beginning of the period and divide the balance equally. Net income for the current year is $80,000. Each parther withdrew $15,000 for personal use during the year. Determine the amount of income that will be allocated to each partner.
    A. M, 30,000 C,50,000
    B. M, 32,500 C, 32,500
    C. M, 35,000 C, 37,500
    D. M, 39,000 C, 41,000
    Can someone please explain this to me. Thank You in advance.
    • CommentAuthorjahubbard
    • CommentTimeFeb 7th 2008
     
    Never mind, I figured it out the answer is D

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