A Partnership Began Its First Year of Operations with the Following

question 47

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 loss for the first year?

• A)$3,900 loss.
• B)$11,700 loss.
• C)$10,400 loss.
• D)$24,700 loss.
• E)$9,100 loss.

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Definitions:

Restraint Of Trade

Any activity or agreement that restricts competition or the free operation of the market, often regulated or prohibited by law.

Consumer Transaction

A deal or agreement between a seller and a buyer for the purchase of goods or services for personal, family, or household use.

Exemption Clause

A contractual term that limits the liability of one of the parties under certain circumstances or for specific types of damages.

Fundamental Obligation

A basic or essential duty bound by law or contract that a party is required to perform.