Use the Following Information to Answer the Question(s) Below

question 6

Multiple Choice

Use the following information to answer the question(s) below.

Bertram and Ernest share profits and losses equally after salary and interest allowances. Bertram and Ernest receive salary allowances of $40,000 and $60,000, respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month, regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month. Partners' drawings of $3,000 per month are not used in determining the average capital balances. Total net income for 2014 is $240,000.
Permanent withdrawals of capital:
Additional investments of capital:

-If the average capital balances for Bertram and Ernest are $200,000 and $240,000,what will the total partnership profit allocations be for Bertram and Ernest in 2014?

• A)$100,000 and $140,000
• B)$108,000 and $132,000
• C)$120,000 and $120,000
• D)$140,000 and $100,000

Learn about the fiduciary duties of members and managers within LLCs and other forms of business partnerships.

Understand the legal consequences of business entities’ actions, including liability for acts that contribute to harm or breach of duties.

Recognize the taxation options and consequences for LLCs and the implications for federal and state taxes.

Understand the rights and responsibilities of members in a business entity, including voting rights, profit distribution, and the impact of dissociation.

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Definitions:

Significant Problem

A major issue or difficulty that has a profound impact on a situation or individual's life, requiring attention or resolution.

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Women who maintain employment outside the home while also fulfilling maternal responsibilities.

Gender Role Stereotypes

Preconceived notions and expectations about behaviors, traits, and activities deemed appropriate for men and women based on their sex.

Flexible

Capable of being bent easily without breaking, and in a metaphorical sense, able to adapt quickly to change or new situations.