Fox,Greg,and Howe Are Partners with Average Capital Balances During 20X1

question 37

Multiple Choice

Fox,Greg,and Howe are partners with average capital balances during 20X1 of $120,000,$60,000,and $40,000,respectively.Partners receive 10% interest on their average capital balances.After deducting salaries of $30,000 to Fox and $20,000 to Howe,the residual profit or loss is divided equally.In 20X1 the partnership sustained a $33,000 loss before interest and salaries to partners.By what amount should Fox's capital account change?

• A) $7,000 increase
• B) $11,000 decrease
• C) $35,000 decrease
• D) $42,000 increase

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