Question

Nancy and Betty enter into a partnership agreement where they decide to share profits according to the following rues. a) Nancy and Betty will receive salaries of $1,500 and $11,500 respectively as the first allocation (b) The next allocation is based on 30% of each partners capital balances. (c) Any remaining profit or loss is to be allocated completely to Betty The partnerships net income for the first year is $50,000. Nancys capital balance is $84,000 and B ettys capital balance is $8,00 at the end of the yeat Calculate the share of profitlioss to be allocated to OA. $26,700 O B. $24,300 O C. $8,280 O D. $23,300

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Answer #1

Answer

First of all, salaries will be paid $1,500

capital will be paid 30 % ( 84000 ) = $ 25200

The share of profit​ (loss) to be allocated to Nancy = 50000 - ( 1500 + 25200 )

= 23300

Option D is correct.

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