Chase and Hatch Are Partners and Share Equally in Income

question 117

Multiple Choice

Chase and Hatch are partners and share equally in income or loss. Chase's current capital balance is $135,000 and Hatch's is $120,000. Chase and Hatch agree to accept Flax with a 30% interest in the partnership. Flax invests $115,000 in the partnership. The balances in Chase's and Hatch's capital accounts after admission of the new partner equal:

• A) Chase $135,000; Hatch $120,000.
• B) Chase $137,000; Hatch $122,000
• C) Chase $133,000; Hatch $118,000.
• D) Chase $139,000; Hatch $120,000.
• E) Chase $135,000; Hatch $124,000.

Understand the process and legalities involved in forming a corporation.

Recognize the advantages and disadvantages of the corporate form of organization.

Understand corporate taxation and financial reporting obligations.

Understand the concepts of price ceilings and price floors in market economics.

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Definitions:

Affective Forecasting

The process by which individuals predict their future emotional states or reactions to events.

Positive Events

Occurrences or experiences that contribute to one's happiness, well-being, or positive emotional state.

Negative Events

Unfortunate or harmful incidents that can lead to emotional distress, physical harm, or psychological impact on individuals.

Habituation

The decrease in response to a stimulus on repeated applications; this is the simplest kind of learning.