heir shares of profit or loss for each of the following it 30000 and the partners have no written partnership a
heir shares of profit or loss for each of the following it 30000 and the partners have no written partnership a
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![E13-4 Allocating profits and losses to the partners [15-20 min]
Bob Freeley and Jack Hart form a partnership, investing $25 000 and $100 000, respectively.
Requirement
Determine their shares of profit or loss for each of the following independent situations:
Loss is $130000 and the partners have no written partnership agreement on sharing loss.
b Profit is $50 000 and the partnership agreement states that the partners share profits and
losses on the basis of their capital balances.
c Profit is $140 000. The first $84000 is shared on the basis of partner capital balances. The
next $42000 is based on partner service, with Bob Freely getting 25% and Jack Hart 75%.
The remainder is shared equally.
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Transcribed Image Text:E13-4 Allocating profits and losses to the partners [15-20 min]
Bob Freeley and Jack Hart form a partnership, investing $25 000 and $100 000, respectively.
Requirement
Determine their shares of profit or loss for each of the following independent situations:
Loss is $130000 and the partners have no written partnership agreement on sharing loss.
b Profit is $50 000 and the partnership agreement states that the partners share profits and
losses on the basis of their capital balances.
c Profit is $140 000. The first $84000 is shared on the basis of partner capital balances. The
next $42000 is based on partner service, with Bob Freely getting 25% and Jack Hart 75%.
The remainder is shared equally.
a
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