A Partnership Began Its First Year of Operations with the Following

question 69

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 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:

Osteoclast Activity

Biological processes involving osteoclast cells, which break down bone tissue, facilitating bone resorption and remodeling.

Calcitonin

A hormone produced by the thyroid gland that helps regulate calcium levels in the blood by inhibiting osteoclast activity.

Broken Bone

A fracture or disruption in the continuity of a bone, often caused by trauma, stress, or disease.

Internal Callus

The internal mass of fibrous tissue and cartilage formed between the ends of a fractured bone during the healing process.