In Their Business Partnership,George Has an Ownership Interest of 59

question 45

Multiple Choice

In their business partnership,George has an ownership interest of 59% and Ben has an ownership interest of 41%.In the current year,they purchase equipment for $10,100.In order to finance the equipment purchase,George makes a contribution of $7,400 and Ben makes a contribution of $2,700 to the partnership.Based on the information provided,which of the following is true regarding the partnership balance sheet?

• A)Both George,Capital and Ben,Capital will increase by $10,100.
• B)George,Capital will increase by $7,400 and Ben,Capital will increase by $2,700.
• C)George,Capital will increase by $10,100 and Ben,Capital will remain unchanged.
• D)George,Capital will increase by $5,959 and Ben,Capital will increase by $4,141.

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Definitions:

Credit Limitations

Restrictions that cap the amount of credit that can be extended to a borrower by a lender.

Refundable Tax Credit

A tax credit that can reduce the taxpayer's liability to zero, with any remaining amount being paid out as a refund.

Nonrefundable Tax Credit

A tax credit that can reduce the amount of tax owed to zero, but cannot result in a tax refund.

Tax Credit

A tax benefit that directly reduces the amount of tax owed dollar for dollar.