The profit of the Busch and Ford partnership is $45,000. The partnership agreement specifies that profits and losses will be shared equally after salary allowances of $25,000 (Busch) and $10,000 (Ford) have been allocated. At the beginning of the year, Busch's Capital account had a balance of $50,000 and Ford's Capital account had a balance of $65,000. What is the balance of Ford's Capital account at the end of the year after profits and losses have been distributed?

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First, allocate the salary allowances: $25,000 to Busch and $10,000 to Ford, totaling $35,000. This leaves $10,000 ($45,000 - $35,000) of profit to be shared equally, giving each partner an additional $5,000. Ford's initial capital was $65,000, plus the $10,000 salary allowance and the $5,000 profit share, totaling $80,000.

The Profit of the Busch and Ford Partnership Is $45,000