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A, B and C are in partnership selling DVDs.
They haven’t been very successful in the past year and in the year ended 30 June 20X9, recorded a loss of $120,000 Their partnership agreement states the following:
• interest on capital to be provided at 4% per annum
• C to be allocated a salary of $25,000, and B $14,000
• no interest to be charged on drawings
• balance of profits to be shared in the ratio 4:3:1.
Capital balances at the start of the year stood as follows:
A $35,000
B $26,000
C $40,000
How much profit or loss is allocated to C?
A $6,220
B $36,220
C ($34,540)
D ($54,920)
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