Tom and William Are Equal Partners in the TW Partnership

question 64

True/False

Tom and William are equal partners in the TW Partnership.Just before TW liquidated, Tom's capital account balance was $50,000 and William's capital account balance was $30,000.To meet the substantial economic effect requirements, any liquidating cash distribution must be allocated equally between the partners.

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Definitions:

Materials Requirements Planning

A production planning and inventory control system used to manage manufacturing processes by determining material requirements.

Derived Demand

Demand for a commodity, service, etc., that is a consequence of the demand for something else; for instance, the demand for steel is derived from the demand for automobiles.

Just-In-Time

An inventory strategy that aligns raw-material orders from suppliers directly with production schedules to minimize stock levels.

EOQ

Economic Order Quantity; the ideal order quantity a company should purchase to minimize its inventory costs, including holding, shortage, and order costs.