Fresco and Garcia Form a Partnership-HVAC Pros

question 71

Essay

Fresco and Garcia form a partnership-HVAC Pros. Garcia's capital contribution is $10,000, and Fresco's is $15,000. The partnership agreement provides that profits are to be shared, with 40 percent for Garcia and 60 percent for Fresco. Later, Garcia makes a $10,000 loan to the partnership when it needs working capital. When the partnership is dissolved, its assets are $50,000, and its debts are $8,000. How should the assets be distributed?

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Definitions:

Axial Loading

Load applied along or parallel to the main axis of an object, typically leading to compressive or tensile stress.

Centrifugal Loading

The force exerted outward on a body moving in a circular path around a central point.

Centripetal Loading

The force acting on a body moving in a circular path directed towards the center around which the body is moving.

Shear Loading

A condition where a material or structure is subjected to forces that cause sliding failure along a parallel plane to the forces applied.