Nancy and Betty Enter into a Partnership Agreement Whereby They

question 85

Multiple Choice

Nancy and Betty enter into a partnership agreement whereby they undertake to share profits according to the following rules: (a) Nancy and Betty will receive a salary of $1,500 and $13,500 respectively.
(b) The next allocation is based on 20% of the partner's capital balances.
(c) Any remaining profit or loss is to be borne completely by Betty.
The partnership's net income for the first year is $40,000. Nancy's capital balance is $90,000 and Betty's capital balance is $10,000 as at the end of the year. Calculate the share of profit/loss to be borne by Betty.

• A)$19,500
• B)$20,500
• C)$4,000
• D)$17,500

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Definitions:

Mismatched

Refers to elements that are not in agreement or are ill-suited to one another.

Stroma

The supportive framework of a biological cell, tissue, or organ, often referring to the connective, functional tissue of an organ as opposed to its parenchyma.

Mitochondria

Organelles found in the cytoplasm of eukaryotic cells, responsible for producing energy through the process of oxidative phosphorylation.

Cytoskeleton

Internal framework of the cell, consisting of microtubules, actin filaments, and intermediate filaments.