The Following Information Is Available on PDC Enterprises,a Partnership,for the Most

question 88

Multiple Choice

The following information is available on PDC Enterprises,a partnership,for the most recent fiscal year:
$$\begin{array} { l l } \text { Total partnership capital at beginning of the year } & \$ 1,080,000 \\\text { Partriership net income for the year } & \$ 1,250,000 \\\text { Withdrawals by partners during the year } & \$ 320,000 \\\text { Additional investrnents by partners during the year } & \$ 70,000\end{array}$$
There are three partners in TGR Enterprises: Pearson,Darling and Cathay.At the end of the year,the partners' capital accounts were in the ratio of 2:2:1,respectively.Compute the ending capital balances of Cathay.

• A) $466,000.
• B) $402,000.
• C) $416,000.
• D) $544,000.
• E) $388,000.

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Definitions:

Relative Economic Conditions

Economic circumstances in one region or country as compared to another.

Long-Run Exposure

A type of currency risk faced by firms that operate internationally over an extended period.

Exchange Rate Risk

The potential for financial loss due to fluctuations in the exchange rate between two currencies.

Cross-Rate

An exchange rate between two currencies derived from their respective relations with a third currency.