Van and Shapiro formed a partnership. As part of the formation, Van contributed equipment whose cost to her was $60,000, with accumulated depreciation for tax purposes of $36,000. The fair value of the equipment was $40,000. The partnership assumed $10,000 of Shapiro's personal debts when she was admitted into the partnership.
After one year of operation, the partnership had the following partial trial balance:
Partners split profits as follows:
(1)A salary of $30,000 is paid to Van.
(2)Remaining profits (or losses) are split 40% to Van, the remainder to Shapiro.
Required:
Calculate the two partners' ending capital balances.

Question

Van and Shapiro formed a partnership. As part of the formation, Van contributed equipment whose cost to her was $60,000, with accumulated depreciation for tax purposes of $36,000. The fair value of the equipment was $40,000. The partnership assumed $10,000 of Shapiro's personal debts when she was admitted into the partnership.
After one year of operation, the partnership had the following partial trial balance:  
Partners split profits as follows:
(1)A salary of $30,000 is paid to Van.
(2)Remaining profits (or losses) are split 40% to Van, the remainder to Shapiro.
Required:
Calculate the two partners' ending capital balances.

Quizplus · Accepted Answer

The Answer of Van and Shapiro formed a partnership. As part of the formation, Van contributed equipment whose cost to her was $60,000, with accumulated depreciation for tax purposes of $36,000. The fair value of the equipment was $40,000. The partnership assumed $10,000 of Shapiro's personal debts when she was admitted into the partnership.
After one year of operation, the partnership had the following partial trial balance:  
Partners split profits as follows:
(1)A salary of $30,000 is paid to Van.
(2)Remaining profits (or losses) are split 40% to Van, the remainder to Shapiro.
Required:
Calculate the two partners' ending capital balances.

Van and Shapiro Formed a Partnership