Fox,Greg,and Howe Are Partners with Average Capital Balances During 20X1

Multiple Choice

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