The Partnership Agreement Between Allen and Barry States That Profit

question 63

Multiple Choice

The partnership agreement between Allen and Barry states that profit and loss sharing arrangements will be based on the ratio of the partner's capital balances. Allen and Barry have capital balances of $90 000 and $60 000 respectively at the end of the accounting period. If profit for the period is $48 000, the profit allocations of each of the partners is:

• A) Allen $24 000; Barry $24 000.
• B) Allen $28 800; Barry $19 200.
• C) Allen $30 000; Barry $18 000.
• D) unable to be calculated from the information provided.

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Definitions:

Synthetic Detergent

Man-made soap-like substances that can emulsify oils and hold dirt in suspension in water, used for cleaning.

Unsaturated Fatty Acid

A type of fatty acid with one or more double bonds in the hydrocarbon chain, which can affect the fluidity of cell membranes.

Triglyceride

A type of fat or lipid found in blood, formed from one molecule of glycerol and three fatty acids.

Micelle

An aggregate of surfactant molecules dispersed in a liquid colloid, forming a structure with hydrophobic tails in the center and hydrophilic heads on the outside.