Alban and Thompson Formed a Partnership with Capital Contributions with a Fair

Alban and Thompson formed a partnership with capital contributions with a fair value of $25,000 and $45,000,respectively.Their partnership agreement calls for Alban to receive a $12,000 annual salary allowance.Also,each partner is to receive a share of earnings equal to a 10% return on capital investments.The remaining income or loss is to be divided equally.If the net income for the year is $48,000,then Alban and Thompson's respective shares are:

A) $14,000; $14,000.
B) $12,000; $16,000.
C) $20,000; $8,000.
D) $16,500; $11,500.
E) $29,000; $19,000.

Correct Answer:

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