Note: This Is a Kaplan CPA Review Question

Multiple Choice

Note: This is a Kaplan CPA Review Question
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 $33,000 loss before interest and salaries to partners. By what amount should Fox's capital account change?

A) $7,000 increase
B) $11,000 decrease
C) $35,000 decrease
D) $42,000 increase