John and Jane Have Capital Account Balances at the End

question 40

Multiple Choice

John and Jane have capital account balances at the end of the year of
$100 000 and $80 000 respectively.Profit of the partnership is $70 000.The profit and loss sharing agreement calls for 1) a salary of $20,000 to John and $10,000 to Jane,2) 10 % p.a.interest on capital balances,3) the residual profit to be split 70 - 30 in favour of John.What is John's share of the distribution?

• A)$49 000
• B)$45 400
• C)$21 000
• D)$24 500

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Definitions:

Savannahs

Grassland ecosystems characterized by scattered trees, found in tropical and subtropical regions, providing habitat for diverse fauna.

Protein Requirements

The necessary amount of protein needed by an organism or individual for proper growth, maintenance, and functioning.

Bipedalism

The ability of an organism to walk on two legs.