Nancy and Betty Enter into a Partnership Agreement Where They

Nancy and Betty enter into a partnership agreement where they decide to share profits according to the following rules:
(a) Nancy and Betty will receive salaries of $1,700 and $14,500 respectively as the first allocation.
(b) The next allocation is based on 20% of each partner's capital balances.
(c) Any remaining profit or loss is to be allocated completely to Betty.
The partnership's net income for the first year is $50,000.Nancy's capital balance is $83,000 and Betty's capital balance is $11,000 as at the end of the year.Calculate the share of profit/loss to be allocated to Betty.

A) $18,300
B) $31,700
C) $3,760
D) $16,100

Correct Answer:

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