Clark and David Are Partners

question 36

Multiple Choice

Clark and David are partners.Clark has contributed $25,000.David has contributed only his time and skill.On dissolution,after all firm debts are paid,$20,000 in assets remains.Which of the following is NOT correct?

• A) The $20,000 remaining after payment is profit that will be equally divided.
• B) The partnership has sustained a loss of $5,000.
• C) David is not entitled to any part of the $20,000.
• D) David has no obligation to reimburse Clark for any loss.

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