Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was $150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use every month during 2012 and 2013.
What was Nolan's capital balance at the end of 2012?
A) $200,000.
B) $224,000.
C) $238,000.
D) $246,000.
E) $254,000.

Question

Quizplus · Accepted Answer

Beginning $200,000 + Interest $20,000 + Salary $0 + Remainder (40%) $38,000 - Withdrawals $12,000 = $246,000

Cleary, Wasser, and Nolan Formed a Partnership on January 1