A Partnership Began Its First Year of Operations with the Following

question 31

Multiple Choice

A partnership began its first year of operations with the following capital balances:

The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Thurman's total share of net income for the second year?

• A) $17,160 income.
• B) $4,160 income.
• C) $19,760 income.
• D) $17,290 income.
• E) $28,080 income.

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Definitions:

Psychological Damage

Emotional or mental injury caused by experiences of stress, trauma, or abuse that adversely affects an individual’s mental health and well-being.

Construct Validity

The degree to which a test measures what it claims, or purports, to be measuring. It is the degree to which the dependent measure assesses what it intends to assess or the manipulation of the independent variable manipulates what it intends to manipulate.

Independent Variable

In experimental research, the variable that is manipulated by the researcher to observe its effect on the dependent variable.

Dependent Variable

In experimental and statistical research, the variable being tested and measured, expected to change as a result of manipulations of the independent variable.