Gary, Peter, and Chris Are Partners

question 59

Multiple Choice

Gary, Peter, and Chris are partners. Their capital balances are, $25,000; $40,000; and $31,000, respectively. As per the partnership agreement, Gary gets a profit share of 2/9; Peter has 4/9; and Chris has 3/9. Gary withdraws from the partnership by receiving $25,000. What will be the impact of this transaction on the journal entries?

• A)Cash will be debited for $25,000.
• B)Peter, Capital will be debited for $1,714.
• C)Chris, Capital will be credited for $1,714.
• D)Gary, Capital will be debited for $25,000.

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Definitions:

Hostile Work Environment

A workplace in which the behavior of others or the organizational climate makes it difficult for an individual to work due to discrimination, harassment, or any unwelcome conduct.

Lower Power

Individuals or groups within a hierarchy that have minimal authority or influence over decision-making processes.

Status

The relative social, professional, or other standing of someone or something.

High Self-esteem

A positive evaluation of oneself, characterized by confidence and a sense of self-worth.