Nancy and Betty Enter into a Partnership Agreement Whereby They

question 68

Multiple Choice

Nancy and Betty enter into a partnership agreement whereby they undertake to share profits according to the following rules: (a) Nancy and Betty will receive salaries of $14,500 and $22,500 respectively as the first allocation.
(b) The next allocation is based on 20% of each partner's capital balances.
(c) Any remaining profit or loss is to be allocated completely to Betty.
The partnership's net loss for the first year is $50,000.Nancy's capital balance is $98,000 and Betty's capital balance is $9000 at the end of the year.Calculate the share of profit (loss) to be allocated to Nancy.

• A) $34,100
• B) $(19,600)
• C) $14,500
• D) $(84,100)