The Cliff and Saha Partnership Agreement Stipulates That Profits and Losses

question 1

Multiple Choice

The Cliff and Saha partnership agreement stipulates that profits and losses will be shared equally after salary allowances of $80,000 for Cliff and $40,000 for Saha. At the beginning of the year, Cliff's capital account had a balance of $80,000, while Saha's capital account had a balance of $70,000. Profit for the year was $100,000. The balance of Saha's capital account at the end of the year after closing is

• A) $70,000.
• B) $40,000.
• C) $120,000.
• D) $100,000.

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