Answered: A local dental partnership has been…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A local dental partnership has been liquidated and the final capital balances are as follow: Atikinson, capital (40% of all profits and losses), $70,000; Kaporale, capital (30%), $30,000; Dennsmore, capital(20%), $(42,000); Rasputin, capital(10%), $(58,000). If Rasputin contributes additional cash of $20,000 to the partnership, what should happen to it?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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