A Partnership Began Its First Year of Operations with the Following

question 50

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 the balance in Thurman'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.

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Definitions:

Percent More

A term used to describe how much one quantity is larger than another as a percentage of the second quantity.

Increased By

A term used to indicate that a quantity is being added to, or grown in value or amount.

Increased By

Refers to the process of adding a certain amount or percentage to an original value, resulting in a higher final amount.

Decrease Of

A reduction or decline in value, number, or amount.