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(Solved) (Latest ver. Aug 2020) - Norr and Caylor: Net Income and Balance

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Norr and Caylor established a partnership on January 1, 2010. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses.

-12% interest on the yearly beginning capital balance
-10% per hour of work that can be billed to the partnerships clients
-the remainder divided in a 3:2 ration
The Articles of Partnership specified that each partner should withdraw no more $1,000 per month
For 2010, the partnerships income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2011, the partnerships income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively. Each partner withdrew $1,000 per month throughout 2010 and 2011.

Determine the amount of net income allocated to each partner for 2010.

Norr:____________________ Caylor:_____________________

Determine the balance in both capital accounts at the end of 2010

Norr:____________________ Caylor:_____________________

Determined the amount of net income allocated to each partner for 2011. Round all calculations to the nearest whole dollar.

Norr:_____________________Caylor:_____________________

Determine the balance in both capital accounts at the end of 2011 to the nearest dollar.

Norr:_____________________ Caylor:_____________________

 







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