Problem - A partnership begins its first year with the following capital balances:
Arthur, Capital 60000
Baxter, Capital 80000
Cartwright Capital 100000
The articles of partnership stipulate that profits and losses be assigned in the following manner:
Each partner is allocated interest equal to 10 percent of the beginning capital balance
Baxter is allocated compensation of 20000 per year
Any remaining P&L are allocated on a 3:3:4 basis
Each partner is allowed to withdraw up to 5000 cash per year.
Assuming that the net income is 50000 and that each partner withdrawls the max amount what is the balance in Cartwright's capital acct at the end of the year.
A. 105800
B. 106200
C. 106900
D. 107400