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A partnership began its first year of operations with the following capital balances:

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

The Articles of Partnership stipulated that profits and losses be assigned in the following manner:

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was Eaton's total share of net income for the second year?

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M948123

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