Farrell and Jimmy Enter into a Partnership Agreement on 1

question 28

Multiple Choice

Farrell and Jimmy enter into a partnership agreement on 1 May 2017.Farrell contributes $50,000 and Jimmy contributes $160,000 as their capital contributions.They decide to share profits and losses in the ratio of their respective capital account balances.The net profit for the year ended 31 December 2017 is $60,000.Which of the following amounts should be credited to Jimmy's capital account?

• A)$45,714
• B)$60,000
• C)$14,286
• D)$50,000

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Single Premium Annuity

A financial product where a lump sum payment is made initially in exchange for a series of payments that will be received at future dates.

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Anticipated return or yield on an investment or financial instrument, often based on historical data or statistical analysis.

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An investment firm known for offering mutual funds and other financial products and services to its clients.

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A financial product that provides a series of equal payments over a period of four years to the holder.