Winchester, Wesson & Smith Are Dissolving Their Partnership

question 49

Multiple Choice

Winchester, Wesson & Smith are dissolving their partnership. Their agreement allocates profits and losses 40:30:30 respectively. The ending capital balances are Winchester $45,000; Wesson
$25,000 and Smith $13,000. After all assets are liquidated and liabilities paid, there is $12,000 in cash to be distributed. Smith's share of the excess cash is

• A)$3,600.
• B)$3,900.
• C)$4,000.
• D)$4,800.

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Definitions:

Bilateral Agreement

A legally binding contract between two parties or countries involving mutual commitments or trade-offs.

Express Agreement

A contract where the terms and conditions are stated clearly and explicitly, often in written form.

Handwritten Notes

Personal or professional notes written by hand as opposed to being typed or digitally recorded, often used for reminders, memoranda, or informal documentation.

Employment Contract

A formal agreement between an employer and an employee that outlines the terms and conditions of employment.