A Partnership Is Formed with 4 Partners Named Wells,Bates,McCollum and Hang.The

question 73

Multiple Choice

A partnership is formed with 4 partners named Wells,Bates,McCollum and hang.The partnership agreement specifies that profits and losses are shared in a ratio of 1:1:2:4,respectively.At the end of the first year,the partnership earned net income of $290,000.What amount will be credited to the capital account for Wells?

• A) $145,000
• B) $ 32,222
• C) $ 72,500
• D) $ 36,250

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Definitions:

Predetermined Overhead Rate

A rate used to allocate indirect costs to products or services, estimated before the costs are incurred.

Direct Material

Raw materials directly used in the manufacturing of a product, explicitly traceable to the goods being produced.

Direct Labor

Labor costs directly tied to the production of goods or services, such as wages for assembly line workers.

Probability Distributions

Mathematical functions that provide the probabilities of occurrence of different possible outcomes for an experiment.