Partners A and B receive a salary allowance of $12,000 and $18,000, respectively, and share the remainder equally. If the company earned $20,000 during the period, what is the effect on A's capital?

Question

Quizplus · Accepted Answer

The remainder after salary allowances is $20,000 - $12,000 - $18,000 = $0. A's share of the remainder is $0 / 2 = $0. A's capital increases by $0 + $12,000 = $12,000.

Partners a and B Receive a Salary Allowance of $12,000