A Partnership Began Its First Year of Operations with the Following

question 55

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 second year?

• A) $133,380.
• B) $84,760.
• C) $105,690.
• D) $132,860.
• E) $71,760.

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