Purchase Solution

Norr and Caylor: Net Income and Balance

Not what you're looking for?

Ask Custom Question

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:_____________________

Purchase this Solution

Solution Preview

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

Norr: 36640 (12000 interest, 10000 compensation, 14640 remainder of allocation)
Caylor: 33360 (9600 ...

Purchase this Solution


Free BrainMass Quizzes
Operations Management

This quiz tests a student's knowledge about Operations Management

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Introduction to Finance

This quiz test introductory finance topics.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Learning Lean

This quiz will help you understand the basic concepts of Lean.