Answer to Question #62229 in Accounting for Hafsa

Question

11) The average capital balances of partners Bridget and Emily are $3,000 and $6,000, respectively. Both women work at the business full-time. The business earned a net income of $12,000 for the period. The partners have agreed to share earnings based on the percentage of original investment. Bridget’s share of the net income is
A. $4,000.
B. $6,000.
C. $8,000.
D. indeterminable.

12) Which method of allocating profits and losses is based on a percentage of initial investment by the partners?
A. Salary allowance
B. Salary expense
C. Profit and loss ratio
D. Interest allowance

14) A general partner is
A. personally liable for all of the debts of the partnership.
B. liable for only the amount of his investment.
C. liable for the amount of taxes paid each period.
D. None of the above

Answer 1

11) If the average capital balances of partners Bridget and Emily are $3,000 and $6,000, respectively, then Bridget’s share of the net income is
A. $4,000.
12) Method of allocating profits and losses that is based on a percentage of initial investment by the partners is:
D. Interest allowance
14) A general partner is
A. personally liable for all of the debts of the partnership.