Question

Larry, Curly, and Moe form a partnership on 01/01/2019. Terms of the written partnership agreement state that net income/loss is to be split in the ratio of 5:3:2, respectively, after salaries and 10% interest on beginnig-of-the-year capital balances are considered. On 01/01/2019, capital contributions by the three are as follows: Larry $50,000, Curly -- $70,000, Moe-- $90,000. Salaries paid during 2019 are as follows: Larry- $40,000, Curly-$45,000, Moe- $60,000. Net income for the partnership for 2019 is $125,000. At 12/31/2019, after closing entries are made, what is the capital account for Curly? $62,500 $70,000 O $107,500 O $151,000 Question 5 4 pt If a bonus is to be paid to an incoming new partner, this indicates that the incoming partner O is contributing more to the partnership than the existing partners' capital accounts after admission of the new partner. is contributing the same amount to the partnership as the existing partners' capital accounts after admission of the new partner. is contributing less to the partnership than the existing partners' capital accounts after admission of the new partner. O The answer cannot be determined without additional information being provided.

Answer 1

Answer

Particulars	Curly (30%)
Capital as on 01/01/2019	70,000
Salaries paid - hence no addition to the capital	-
Interest on Opening Capital (No profit after salary, hence no interest)	-
Net Income attributable - NIL	-
Capital as on 31/12/2019	70,000

Answer 5 - Incoming partner is contributing more to the partnership than the existing partner's capital accounts after admission of the new partner