Blaser,Lukins,and Franko Formed a Partnership with Blaser Contributing $160,000,Lukins Contributing

question 54

Multiple Choice

Blaser,Lukins,and Franko formed a partnership with Blaser contributing $160,000,Lukins contributing $520,000,and Franko contributing $240,000.Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments.If the partnership had income of $275,000 for its first year of operation,what amount of income (rounded to the nearest dollar) would be credited to Franko's capital account?

• A)$50,000
• B)$240,000
• C)$91,667
• D)$71,739
• E)$275,000

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Definitions:

Compensation Expense

Costs associated with the wages, salaries, and benefits provided to employees, recorded on the income statement.

Service Period

The period of time over which employee services are rendered in exchange for an award, common in the context of stock compensation plans.

Stock Option Plan

A compensation scheme in which employees are given the option to purchase company stock at a discounted price, often used to align employees' interests with those of the shareholders.

Stock Options

Financial derivatives that confer the right, but not the obligation, to buy or sell shares of stock at a specified price within a certain time frame.