W Bell and C

question 44

Multiple Choice

W. Bell and C. Quirk started a partnership in 2013. Because Bell contributed a larger amount toward the partnership at inception, the partnership agreement specified the following split of profits and losses in a two- phase allocation. The first allocation would split profits and losses in proportion to the partners' relative capital balances up to 20% of those balances. The remainder would be split evenly. At the end of the first year, the partnership had a loss of $40 000. Partners' capital balances were as follows: W. Bell: $102 000 C. Quirk: $18 000
At the end of 2013, after the year's loss was allocated, what was the updated balance in Quirk's capital account?

• A)$13 600
• B)$11 600
• C)$14 400
• D)$6 400

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Definitions:

Short Run

A period in economics during which at least one input, such as factory capacity, is fixed and cannot be changed.

Unemployment Benefits

Payments made by the government or a social insurance scheme to unemployed individuals who meet certain eligibility criteria.

Aggregate Demand

The combined demand for goods and services across an economy, pegged at a particular overall price level during a predetermined time period.

Constitutional Amendment

A formal change or addition proposed or made to a constitution, which alters its content and legal ordering.