Xavier and Yolanda Have Original Investments of $50,000 and $100,000

question 66

Multiple Choice

Xavier and Yolanda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%, salary allowances of $27,000 and $18,000 respectively, and the remainder equally. How much of the net loss of $6,000 is allocated to Yolanda?

• A) $1,000
• B) $3,000
• C) $5,000
• D) $0

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Definitions:

Concession Revenue

Income earned from granting the rights to operate and sell specific products or services within a venue or to a particular market.

Binding Price Floor

A minimum price set by the government above the equilibrium price, causing a surplus by preventing the market price from falling to its equilibrium level.

Excess Supply

A situation where the quantity of a good or service supplied is greater than the quantity demanded at a given price.

Equilibrium

A state where supply equals demand, allowing the market for a good or service to stabilize at a certain price and quantity.