Ellen, Fargo, and Gary are partners who share profits and 2 answers below »
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Ellen, Fargo, and Gary are partners who share profits and losses 20 percent, 20 percent, and 60 percent, respectively, after Ellen and Fargo each receive a $12,000 salary allowance. Capital balances on January 1, 2011, are as follows:
Ellen (20%) …………….. $ 69,000
Fargo (20%) ……………… 85,500
Gary (60%) ……………… 245,500
During 2011, Gary invested an additional $20,000 in the partnership, and Ellen and Fargo each withdrew $12,000, equal to their salary allowances as provided by the profit and loss sharing agreement. The partnership net assets at December 31, 2011, were $481,000.
REQUIRED: Prepare a statement of partnership capital for the year ended December 31, 2011.
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