The AB,BC,and CD Partnerships Merge into the ABCD Partnership

question 61

Multiple Choice

The AB,BC,and CD Partnerships merge into the ABCD Partnership.AB (owned by Austin and Ben) contributes assets worth $100,000.BC (owned by Ben and Charlie) contributes assets worth $200,000.CD (owned by Charlie and Dennis) contributes assets worth $300,000.The capital and profits interest in ABCD is owned by: Austin,10%; Ben,30%; Charlie,25%; and Dennis,35%.ABCD Partnership is a continuation of

• A)none of the partnerships.
• B)AB.
• C)BC.
• D)CD.

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Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the market capitalization remains the same.

Market Price

Market price is the current value at which an asset or service can be bought or sold in a marketplace.

Shares Outstanding

Represents the total number of shares of stock that are currently owned by the company's shareholders, including shares held by institutional investors and restricted shares owned by the company’s officers and insiders.

Retained Earnings Statement

A financial statement that shows how a company's retained earnings have changed during a specific period.