A Partnership Began Its First Year of Operations with the Following

question 76

Multiple Choice

A partnership began its first year of operations with the following capital balances:
Young, Capital: $143,000
Eaton, Capital: $104,000
Thurman, Capital: $143,000
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 the balance in Thurman's Capital account at the end of the first year?

• A) $120,900.
• B) $118,300.
• C) $126,100.
• D) $80,600.
• E) $111,500.

---

Definitions:

Discount Pricing

A marketing strategy where products or services are offered at a reduced price to stimulate demand or attract customers.

Bundle Pricing

A pricing strategy where multiple products or services are packaged together and sold at a single price.

BOGOs

An acronym for "Buy One, Get One" sales promotions, where a customer gets a second item for free or at a reduced price after purchasing one at regular price.

Free Goods

Items or services provided at no cost to the recipient, often used as promotional tools or as part of a marketing strategy to incentivize purchases or loyalty.