Fox, Greg, and Howe are partners with average capital balances during 20X1 of $120,000, $60,000,...
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Accounting
Fox, Greg, and Howe are partners with average capital balances during 20X1 of $120,000, $60,000, and $40,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of $30,000 to Fox and $20,000 to Howe, the residual profit or loss is divided equally. In 20X1 the partnership sustained a $50,000 loss before interest and salaries to partners. By what amount should Fox's capital account change?
A)42,000 increase B)$6,800 decrease C)No change D)$7,000 decrease
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