Nancy and Betty Enter into a Partnership Agreement Whereby They

question 41

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 $11,500 and $23,500 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 loss for the first year is $50,000. 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 Nancy.

• A)$29,500
• B)$(18,000)
• C)$11,500
• D)$(79,500)

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