During 2013,Schmidt Invested $75,000 and Baldwin Invested $90,000 in a Partnership.They

question 98

Multiple Choice

During 2013,Schmidt invested $75,000 and Baldwin invested $90,000 in a partnership.They agreed that Baldwin would get a salary allowance of $30,000 and they would share any remaining income or loss equally.During 2013 the partnership earned net income of $300,000 and they each withdrew $12,000 from the partnership.Which of the following statements is correct?

• A)Schmidt Capital at the end of 2013 is $213,000.
• B)Schmidt Capital at the end of 2013 is $210,000.
• C)Baldwin Capital at the end of 2013 is $243,000.
• D)Baldwin Capital at the end of 2013 is $255,000.
• E)Total Capital at the end of 2013 has increased by $300,000.

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Definitions:

Operating Decisions

Choices made by management regarding daily operations of a business that affect its efficiency and effectiveness.

Top Management

The highest level of management in an organization, responsible for making strategic decisions.

Decentralization

The distribution of decision-making powers from central authority to individuals or units at lower levels within an organization or state.

Responsibility Accounting

The process of measuring and reporting operating data by areas of responsibility.