Question - Rob, Chris, and Matt are in a partnership that provides banking services.
Profits/losses are split: 50%, 20% and 30%, respectively.
Beginning capital balances are as follows:
Rob: 190,000 Chris: 220,000 Matt: 430,000
The net income: $43,000 for 2013
Loss: $42,000 for 2014
Each individual partner is allowed 14% in interest for the beginning of the year capital balances.
$9,000 is allotted in annual drawings. Rob and Chris are also allotted $15,000 in compensation/year.
Matt's contribution was $30,000 at the beginning of 2014 because of projected loss.
1. Provide income allocations for all partners for 2013 and 2014.
2. Provide 2014 closing entries/capital balances as of 12/31/14.