A Partnership Began Its First Year of Operations with the Following

question 77

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 Thurman's total share of net income for the second year?

• A)$17,160 income.
• B)$4,160 income.
• C)$19,760 income.
• D)$17,290 income.
• E)$28,080 income.

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process or providing services.

Budgeted Costs

Predicted or planned expenses that are outlined in a company's budget for a specific period.

Fabricating Department

The division within a manufacturing company where raw materials are assembled or processed into finished goods.

Assembling Department

A section within a manufacturing facility where components are put together to form a final product.