Question
Fred and Barney started a partnership. Fred invested $10,000 in the business and Barney invested $18,500. The partnership agreement stipulated that profits would be divided
Fred and Barney started a partnership. Fred invested $10,000 in the business and Barney invested $18,500. The partnership agreement stipulated that profits would be divided as follows: Each partner would receive a 14% return on invested capital with the remaining income being distributed equally between the two partners. Assuming that the partnership earned $24,000 during an accounting period, the amount of income assigned to the two partners would be:
| Fred | Barney | |
|---|---|---|
| A. | $ 8,605 | $ 7,415 |
| B. | $ 10,000 | $ 14,000 |
| C. | $ 12,000 | $ 12,000 |
| D. | $ 11,405 | $ 12,595 |
Multiple Choice
Choice B
Choice A
Choice C
Choice D
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Finance And Accounting For Nonfinancial Managers
Authors: Steven A. Finkler
5th Edition
9780808046905
