The capital accounts of Hawk and Martin have balances of $160,000 and $140,000, respectively, on January 1, 2010, the beginning of the current fiscal year. On April 10, Hawk invested an additional $10,000. During the year, Hawk and Martin withdrew $86,000 and $68,000, respectively, and net income for the year was $258,000. The articles of partnership make no reference to the division of net income. Based on this information, the statement of partners' equity for 2010 would show what amount as total capital for the partnership on December 31, 2010?

Question

Quizplus · Accepted Answer

The total capital is calculated by adding the initial capital balances, additional investments, net income, and subtracting withdrawals. Initial capital: $160,000 (Hawk) + $140,000 (Martin) = $300,000. Additional investment by Hawk: $10,000. Total withdrawals: $86,000 (Hawk) + $68,000 (Martin) = $154,000. Net income: $258,000. Total capital = $300,000 + $10,000 + $258,000 - $154,000 = $414,000.

The Capital Accounts of Hawk and Martin Have Balances of $160,000