Wu and Mannis Each Sell 1/3 of Their Partnership Interest

question 177

Multiple Choice

Wu and Mannis each sell 1/3 of their partnership interest to Patel receiving $105000 each. At the time of the admission each partner has a $315000 capital balance. The entry to record the admission of Patel will show a

• A) debit to Cash for $210000.
• B) credit to Patel Capital for $315000.
• C) debit to Mannis Capital for $315000.
• D) debit to Wu Capital for $105000.

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Definitions:

Variable Costs

Expenses that vary directly with the amount of production output of a company.

Purely Competitive Industry

Characterized by many firms selling identical products, where no single firm can influence the market price, ensuring competition based on price.

Short-Run Costs

Costs that vary with the level of output in the short term, where some inputs are fixed.

Fertilizer

A substance, either chemical or organic, introduced to soil or land to improve its fertility and boost the growth of plants.