A Partnership Began Its First Year of Operations with the Following

question 17

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 Eaton'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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Definitions:

Environmentally Sound

Practices or operations that have a minimal negative impact on the environment, promoting sustainability.

Lease Rate

The cost of leasing or renting a particular asset, property, or equipment, usually expressed as a payment amount per time period.

Sale And Leaseback

A transaction where a company sells an asset and leases it back from the buyer, providing liquidity while retaining the asset's use.

Lessee

A lessee is a person or entity who rents land or property from a lessor under the terms of a lease agreement.