Douglas and Johnson Each Invested $50 000 in a Partnership

question 19

Multiple Choice

Douglas and Johnson each invested $50 000 in a partnership where they agreed to share profits 60% Douglas,40% Johnson.The partnership business was not successful and now has no assets.In addition they are being sued for $80 000 by a supplier for non-payment of invoices.What is the amount for which Douglas could be held personally responsible if the lawsuit is successful ignore any possible legal costs.

• A)Zero
• B)$40 000
• C)$48 000
• D)$80 000

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Definitions:

Shareholder Value

The value delivered to shareholders of a corporation through dividends and appreciation of the company's stock price.

Customer Value

The perception of the benefits a product or service provides to a customer compared to its cost.

Traditional Management Accounting

A method of accounting focused on reporting financial information to managers for the purpose of planning, decision making, and controlling operations within an organization.

Financial Performance Measures

Indicators that gauge a business's economic well-being, focusing on metrics of profitability, liquidity, and solvency.