Cleary, Wasser, and Nolan Formed a Partnership on January 1

question 57

Multiple Choice

Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was $150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use every month during 2012 and 2013.
What was Wasser's capital balance at the end of 2012?

• A) $150,000.
• B) $160,000.
• C) $165,000.
• D) $213,000.
• E) $201,000.

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Definitions:

Amino Group

A weakly basic functional group; abbreviated —NH2.

Anaerobic Conditions

Environments that lack oxygen, allowing for the survival and growth of organisms that can function without oxygen.

Pyruvate

A key intermediate in several metabolic pathways throughout the cell, crucial in the process of energy production.

Acetaldehyde

A colorless, volatile compound with a pungent smell, used in the manufacture of acetic acid, perfumes, and flavors, and as a solvent.