Bertram and Ernest share prof

SoccerBoss
Category:
Accounting
Price: $50 USD

Question description

Bertram and Ernest share profits and losses equally after salary and interest allowances. Bertram and Ernest receive salary allowances of $40,000 and $60,000, respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month, regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month. Partners’ drawings of $3,000 per month are not used in determining the average capital balances. Total net income for 2011 is $240,000. BertramErnest January 1 capital balances$200,000$240,000 Yearly drawings ($3,000 a month)(36,000)(36,000) Permanent withdrawals of capital: June 3(24,000) May 2(30,000) Additional investments of capital: July 380,000 October 2100,000 What is the weighted-average capital for Bertram and Ernest in 2011? A) $224,000 and $245,000 B) $203,333 and $221,167 C) $221,333 and $239,167 D) $256,000 and $220,000

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(Top Tutor) Daniel C.
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