Wheadon, Davis, and Singer Formed a Partnership with Wheadon Contributing

question 117

Multiple Choice

Wheadon, Davis, and Singer formed a partnership with Wheadon contributing $60,000, Davis contributing $50,000 and Singer contributing $40,000. Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments.
- If the partnership had income of $75,000 for its first year of operation, what amount of income (rounded to the nearest thousand) would be credited to Wheadon's capital account?

• A) $30,000.
• B) $40,000.
• C) $25,000.
• D) $20,000.
• E) $75,000.

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Definitions:

Total Revenue

The cumulative income produced from the primary business operations of a company, manifesting from goods or service sales.

Total Cost

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Profit-Maximizing

The process or strategy undertaken by a company to increase its profits to the highest possible level.

Loss-Minimizing

A strategy employed by businesses to reduce financial losses under unfavorable market conditions, often by cutting costs or restructuring operations.