The capital accounts of Harrison and Marti have balances of $160,000 and $110,000, respectively, on January 1, 2014, the beginning of the current fiscal year. On April 10, Harrison invested an additional $20,000. During the year, Harrison and Marti withdrew $96,000 and $78,000, respectively, and net income for the year was $264,000. The articles of partnership make no reference to the division of net income. Based on this information, the statement of partners' equity for 2014 would show what amount in the capital account for Marti on December 31, 2014?

Question

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- Harrison's Beginning Capital: $160,000
- Marti's Beginning Capital: $110,000
- Harrison's Investment: +$20,000
- Harrison's Withdrawal: -$96,000
- Marti's Withdrawal: -$78,000
- Net Income: +$264,000

Harrison's ending capital can be calculated as follows:
Beginning Capital + Investment - Withdrawal + Net Income
$160,000 + $20,000 - $96,000 + $264,000 = $348,000

We can then calculate Marti's ending capital by subtracting Harrison's ending capital from the total ending capital:
Total Ending Capital - Harrison's Ending Capital = Marti's Ending Capital
($348,000 + $110,000) - $348,000 = $110,000

Therefore, Marti's capital account on December 31, 2014, would be $110,000.

The Capital Accounts of Harrison and Marti Have Balances of $160,000