Nancy and Betty Enter into a Partnership Agreement Whereby They

Nancy and Betty enter into a partnership agreement whereby they undertake to share profits according to the following rules:
(a) Nancy and Betty will receive salaries of $12,500 and $24,500 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 loss for the first year is $30,000.Nancy's capital balance is $107,000 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 Nancy.

A) $33,900
B) $(21,400)
C) $12,500
D) $(3,900)

Correct Answer:

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