A partnership begins its first year with the following capital balances: Alfred, Capital $ 48,000 Bernard, Capital 58,000 Collins, Capital 68,000 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. Bernard is allocated compensation of $16,000 per year. Any remaining profits and losses are allocated on a 3:3:4 basis, respectively. Each partner is allowed to withdraw up to $4,000 cash per year. Assuming that the net income is $58,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year

The balance in Collins capital account at the end of that year is:

$80,640.

Explanation:

a) Data and Calculations:

                                           Alfred       Bernard      Collins         Total

Capital balances              $48,000    $58,000     $68,000    $174,000

Profit sharing:                                                                            $58,000

Interest on capital (10%)    $4,800      $5,800        $6,800     ($17,400)

Compensation                                      16,000                        ($16,000)

Allocation of balance          7,380          7,380          9,840   ($24,600)

Drawings                           (4,000)        (4,000)        (4,000)   ($12,000)

Balances                         $56,180      $83,180     $80,640  

answer: i'd say the answer is d because the information system is the human already doing the activity.