At the end of its first year of operations on December 31, 2017, NBS Company's accounts show the following.
| Partner |
Drawings |
Capital |
Art Niensted
|
$23,100 |
$48,100 |
Greg Bolen
|
13,800 |
39,500 |
Krista Sayler
|
11,300 |
24,500
|
The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2017 has not been closed to the partners' capital accounts.
1) Net income is $31,000. Income is shared 6 : 3 : 1.
2) Net income is $41,500. Niensted and Bolen are given salary allowances of $15,400 and $10,800, respectively. The remainder is shared equally.
3) Net income is $18,200. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $12,990 salary allowance. The remainder is shared equally.