Cox, North, and Lee Form a Partnership

question 63

Multiple Choice

Cox, North, and Lee form a partnership. Cox contributes $180,000, North contributes $150,000, and Lee contributes $270,000. Their partnership agreement calls for the income or loss division to be based on the ratio of capital invested.
-If the partnership reports income of $150,000 for its first year, what amount of income is credited to Lee's capital account? (Do not round your intermediate calculations.)

• A) $67,500.
• B) $54,000.
• C) $60,000.
• D) $50,000.
• E) $45,000.

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Definitions:

Legal Aid

Assistance provided to individuals unable to afford legal representation and access to the court system.

Small Business Owner

An individual who owns and operates a business with a small number of employees and relatively low volume of sales.

Retainer

A deposit paid by a client to a lawyer before the lawyer commences work on behalf of the client.

Contingency Fee Agreement

A contingency fee agreement is an arrangement between a client and an attorney where the attorney's fees are only payable if the case is won, usually as a percentage of the settlement or award.