A Partnership Began Its First Year of Operations with the Following

question 80

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 Eaton's Capital account at the end of the second year?

• A) $133,380.
• B) $84,760.
• C) $105,690.
• D) $132,860.
• E) $71,760.

---

Definitions:

Organizational Resources

Assets, capabilities, processes, information, and knowledge that an organization controls and utilizes to achieve its objectives.

Anti-Union Consultants

Anti-Union Consultants are professionals hired by companies to prevent or disrupt the formation of labor unions among employees.

Face-To-Face Interaction

Direct, in-person communication between individuals, allowing for non-verbal cues and immediate feedback.

Solidarity Theory

A concept in social sciences that emphasizes unity and agreement among individuals or groups, supporting each other to achieve common goals.