Table 12-7 Bill, Bob, and Bo, Are Partners in the Trendy Company

question 18

Multiple Choice

Table 12-7
Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently $60,000, $100,000, and $140,000, respectively.
-Refer to Table 12-7.Burt has been offered a 25% interest in the firm for $60,000 cash investment.Assuming Burt takes the offer,the entry to record his investment in the partnership includes a:

• A) debit to Cash for $75,000
• B) debit to loss on sale of partnership interest for $46,000
• C) credit to Bill, Capital for $1,500
• D) debit to Bob, Capital for $12,000

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Definitions:

Rigid Boundaries

Strict limits set in relationships or systems that are difficult to adjust or cross.

Heritability

A statistical estimate of the proportion of observed variation in a particular trait among individuals in a population that is due to genetic differences.

Statistical Estimate

A value derived from statistical analysis that provides an approximation of a population parameter based on sample data.

Genetic Differences

Variations in the DNA sequences among individuals that contribute to the uniqueness of each person's physical and behavioral traits.