Note: This Is a Kaplan CPA Review Question

question 6

Multiple Choice

Note: This is a Kaplan CPA Review Question
Fox, Greg, and Howe are partners with average capital balances during 20X1 of $120,000, $60,000, and $40,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of $30,000 to Fox and $20,000 to Howe, the residual profit or loss is divided equally. In 20X1 the partnership sustained a $33,000 loss before interest and salaries to partners. By what amount should Fox's capital account change?

• A) $7,000 increase
• B) $11,000 decrease
• C) $35,000 decrease
• D) $42,000 increase

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Definitions:

Commercial Fishing

The activity of catching fish and other seafood for commercial profit, primarily from wild fisheries.

Population Pressure

The stress on resources and environment resulting from the density or increase of a population in a given area.

Exponential Growth

A population grows by a fixed percentage in successive time intervals; the size of each increase is determined by the current population size.

Limiting Factors

Environmental conditions that limit the growth, abundance, or distribution of an organism or a population within an ecosystem.