A Partnership Began Its First Year of Operations with the Following

question 74

Multiple Choice

A partnership began its first year of operations with the following capital balances: The Articles of Partnership stipulated that profits and losses be assigned in the following manner:Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman.Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.Each partner withdrew $13,000 per year.Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.What was the balance in Thurman's Capital account at the end of the first year?

• A) $120,900.
• B) $118,300.
• C) $126,100.
• D) $80,600.
• E) $111,500.

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Definitions:

Point Estimate

Single value used to estimate an unknown population parameter.

Population Parameter

A numerical value that represents a characteristic of an entire population, such as its mean or standard deviation.

Standard Error

The standard deviation of the sampling distribution of a statistic, most commonly the mean; it is used to estimate the accuracy of a sample mean compared to the population mean.

Confidence Interval

A range of values, derived from sample statistics, that is believed to contain the true value of a population parameter with a certain level of confidence.