In a Partnership Business, Jack Has an Ownership of 60

question 150

Multiple Choice

In a partnership business, Jack has an ownership of 60% and Teresa has an ownership of 40%. For developing the business, Jack contributed $7,000 and Teresa contributed $3,000 on July 1. Which of the following is true of this scenario?

• A)Either the total contribution of $10,000 or the contribution in the ownership ratio will be recorded.
• B)Only the total contribution of $10,000 will be recorded.
• C)Individual contribution of $7,000 by Jack and $3,000 by Teresa will be recorded.
• D)60% of Jack's contribution and 40% of Teresa's contribution will be recorded.

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Definitions:

Holder-Of-Record Date

The date on which existing shareholders on company records are designated as the recipients of stock rights. Also the date of record.

Tombstone

An advertisement in a financial publication announcing a public offering of securities, containing basic details of the issue.

Preliminary Prospectus

An initial document provided by a securities issuer that describes the details of an upcoming offer to the public, often called a "red herring."

Ex-Rights

Ex-rights refer to a situation where a stock is traded without the benefit of a rights offering, which was previously announced to its shareholders.