Fred and Barney Started a Partnership $\$ 20,500 \quad \$ 17,500$

question 38

Multiple Choice

Fred and Barney started a partnership.During Year 1,Fred invested $20,000 in the business and Barney invested $32,000.The partnership agreement called for each partner to receive an annual distribution equal to 15% of his capital contribution.Any further earnings were to be retained in the business and divided equally between the partners.The partnership reported net income of $38,000 during Year 1.How will the $38,000 of net income be split between Fred and Barney respectively? (Hint: Consider both the cash withdrawals and allocation of remaining income.)
Fred Barney

• A) \(\$ 20,500 \quad \$ 17,500\)
• B) \(\$ 20,000 \quad \$ 18,000\)
• C) \(\begin{array} { l l }
• \$19,000 & \$ 19,000
• \end{array}\)
• D) \(\$18,100 \quad \$ 19,900\)

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Definitions:

Delinquency Letter

A notification sent by a lender to the borrower indicating a missed payment and the start of delinquency.

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