A partnership began its first year of operations with the subsequent capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
The Articles of Partnership stipulated that losses and profits be assigned in the subsequent manner:
Young was to be awarded an yearly salary of $26,000 with $13,000 salary assigned to Thurman.
Every 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, correspondingly.
Each partner withdrew $13,000 per year.
Consider that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.