A Partnership Began Its First Year of Operations with the Following

question 36

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 Young'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:

Psychotherapy

A therapeutic treatment involving psychological methods, typically involving conversations with a psychologist, to address mental health challenges or disorders.

Enduring Love

A long-lasting, deeply felt love that perseveres through challenges and time.

Married

Pertains to a legal and social status that represents a formal union between two individuals, typically recognized by law, where they become partners.

Commitment

The decision and intent to maintain a relationship in spite of the difficulties and costs that may arise.