A partnership began its first year of operations with the following capital balances: Young, Capital: $143,000 Eaton, Capital: $104,000 Thurman, Capital: $143,000 The Articles of Partnership stip

A partnership began its first year of operations with the following capital balances:

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

The Articles of Partnership stipulated that profits and losses be assigned in the following manner:

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

26. What was Young’s total share of net loss for the first year?

A. $3,900 loss.

B. $11,700 loss.

C. $10,400 loss.

D. $24,700 loss.

E. $9,100 loss.

AACSB: Analytic

AICPA FN: Measurement

Bloom’s: Application

Difficulty: Medium

Learning Objective: 09-06 Allocate income to partners when interest and/or salary factors are included.

27. What was Eaton’s total share of net loss for the first year?

A. $3,900 loss.

B. $11,700 loss.

C. $10,400 loss.

D. $24,700 loss.

E. $9,100 loss.

AACSB: Analytic

AICPA FN: Measurement

Bloom’s: Application

Difficulty: Medium

Learning Objective: 09-06 Allocate income to partners when interest and/or salary factors are included.

28. What was Thurman’s total share of net loss for the first year?

A. $3,900 loss.

B. $11,700 loss.

C. $10,400 loss.

D. $24,700 loss.

E. $9,100 loss.

AACSB: Analytic

AICPA FN: Measurement

Bloom’s: Application

Difficulty: Medium

Learning Objective: 09-06 Allocate income to partners when interest and/or salary factors are included.

29. What was the balance in Young’s Capital account at the end of the first year?

A. $120,900.

B. $118,300.

C. $126,100.

D. $80,600.

E. $111,500.

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