Answer:
D. $8,000.
Explanation:
*Net loss is considered as the amount to be allocated between partners on equal sharing ratio. Otherwise the net allocated amount will be 76,000 ( -16000-5000-10000-27000-18000) net loss and Seth's share will be -38,000 (76000/2) . Question has no option of this amount.
Statement of Partners Equity
For the Year end MM-DD-YY
Seth Rachel
$ $
Beginning Capital balance = 0 0
Investment by partners = 50,000 100,000
interest Allowance = 5000 10,000
Salary Allowance = 27000 18,000
Net loss Allocated = <u> (8,000) </u> <u> (8,000) </u>
Ending capital balance = <u> 74,000 </u> <u> 120,000</u>
