PaulCo, DavidCo, and Sean Form a Partnership with Cash Contributions

question 75

True/False

PaulCo, DavidCo, and Sean form a partnership with cash contributions of $80,000, $50,000 and $30,000, respectively, and agree to share profits and losses in the ratio of their original cash contributions. PaulCo uses a January 31 fiscal year-end, whereas DavidCo and Sean use a November 30 and December 31 year-end, respectively. The partnership must use the least aggregate deferral method to determine its year-end.

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Definitions:

Microscopic Organisms

Tiny life forms, not visible to the naked eye, including bacteria, protozoa, and certain types of fungi and algae.

Calcium Carbonate

A chemical compound with the formula CaCO3, found in rocks such as limestone, chalk, and marble, and is a major component of shells of marine organisms, snails, and eggs.

Chalk Formation

A type of soft, white, porous sedimentary rock composed mainly of calcite or aragonite, formed from the skeletal remains of microorganisms.

Microscopic Organisms

Tiny life forms, often single-celled, that can only be seen with the aid of a microscope.