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  1. business
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  3. a partnership begins its first year of operations

A partnership begins its first year of operations with the following capital balances: According to...

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Accounting

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A partnership begins its first year of operations with the following capital balances: According to the articles of partnership, all profits will be assigned as follows: - Allegan will be awarded an annual salary of $14,000 with $7,000 assigned to Kent. - The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. - The remainder will be assigned on a 5:2:3 basis, respectively. - Each partner is allowed to withdraw up to $7,000 per year. The net loss for the first year of operations is $26,000, and net income for the subsequent year is $27,000. Each partner withdraws the maximum amount from the business each period. Required: Prepare schedules that compute the balances in each partner's capital account at the end of each of the first two years of partnership operations. Prepare sichedules that compute the balances in each partner's capital account at the end of Year One of partnership operations. Noter Amounts to be deducted should be indicated with minus sign. Prepare schedules that compute the balances in each partner's capital account at the end of Year One of partnership operations. Note: Amounts to be deducted should be indicated with minus sign

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