On January 1, 2021, A, B, C and D formed Bakya Trading Co., a partnership, with capital contributions as follows: a, 50,000; B,25,000; C 25,000 and D 20,000. The partnership contract provided that each partner shall receive a 5% interest on contributed capital, and that A and B shall receive salaries of 5,000 and 3,000 respectively. The contract also provided that C shall receive a minimum of 2,500 per annum and D a minimum of 6,000, which is inclusive of amounts representing interest and share of remaining profits. The balance of the profits shall be distributed to A,B,C and D in the ratio of 3;3;2;2. What amount must be earned by the partnership, before any charge for interest and salaries so that A may receive an aggregate of 12,500 including interest, salary and share of profits? a. 16,667 b. 30,000 c. 30,667 d. 32,333
On January 1, 2021, A, B, C and D formed Bakya Trading Co., a partnership, with capital
contributions as follows: a, 50,000; B,25,000; C 25,000 and D 20,000. The partnership contract
provided that each partner shall receive a 5% interest on contributed capital, and that A and B shall
receive salaries of 5,000 and 3,000 respectively. The contract also provided that C shall receive a
minimum of 2,500 per annum and D a minimum of 6,000, which is inclusive of amounts representing
interest and share of remaining profits. The balance of the profits shall be distributed to A,B,C and D
in the ratio of 3;3;2;2. What amount must be earned by the partnership, before any charge for interest
and salaries so that A may receive an aggregate of 12,500 including interest, salary and share of
profits?
a. 16,667
b. 30,000
c. 30,667
d. 32,333
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