It Is Agreed in the Partnership Agreement of R and B

question 57

Multiple Choice

It is agreed in the partnership agreement of R and B that profit and loss sharing arrangements will be based on the ratio of the partner's capital balances. R and B have capital balances of $75 000 and $50 000 respectively at the end of the accounting period. If profit is $38 000 the profit allocations of each of the partners is:

• A) R $19 000; B $19 000.
• B) R $22 800; B $15 200.
• C) R $20 000; B $18 000.
• D) unable to be calculated from the information provided.

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