Table 12-13 Burns and Allan Have Formed a Partnership and Invested $40,000

question 174

Essay

Table 12-13
Burns and Allan have formed a partnership and invested $40,000 and $60,000, respectively. They have agreed to share profits as follows:
1) An annual allocation to Burns of $20,000 and to Allan of $10,000 based on service
2) The next $15,000 is to be allocated according to their original capital contributions to the partnership.
3) The remainder is to be allocated 5:4 respectively
-Refer to Table 12-13.Assuming that the business had a loss of $9,000,allocate the loss to Burns and Allan.

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Definitions:

Business Contract

A legally binding agreement between two or more parties that outlines the terms and conditions of business transactions.

Civil Law

A legal system based on written codes and statutes, as opposed to common law, which is based on judicial decisions and precedent.

Criminal Law

A system of law focused on the punishment of individuals who commit crimes.

Defense of Marriage Act

The Defense of Marriage Act was a U.S. federal law enacted in 1996 that defined marriage for federal purposes as the union of one man and one woman, and allowed states to refuse to recognize same-sex marriages granted under the laws of other states.