The Partnership Agreement for Smith Wesson & Davis, a General

The partnership agreement for Smith Wesson & Davis, a general partnership, provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Smith contributed $100,000, Wesson contributed $60,000 and Davis contributed $20,000. In the partnership's first year of operation, it incurred a loss of $210,000. What amount of the partnership's loss, rounded to the nearest dollar, should be absorbed by Smith?

A) $70,000
B) $116,667
C) $23,333
D) $105,000
E) $52,500

Correct Answer:

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