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A partnership begins its first year of operations with the following capital balances:
Winston, Capital 110000Durham, Capital 80000Salem, Capital 110000
According to the articles of partnership, all profits will be assigned as follows:
Assume that the net loss for the first year of operations is $20,000 and that net income for the subsequent year is $40,000. Assume also that each partner withdraws the maximum amount from the business each period. What is the balance in Winston's capital account at the end of the second year?
a. $102,600.
b. $104,400.
c. $108,600.
d. $109,200.
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