Asked by Amelia Bishop on Jun 11, 2024
Verified
Carrie and Callie form a partnership in which Carrie contributes $85,000 in assets and agrees to devote half time to the partnership. Callie contributed $50,000 in assets and agrees to devote full time to the partnership. If no additional information is available, how will Carrie and Callie share in the division of income?
A) 5:8.5
B) 1:2
C) 1:1
D) 2:1
Full Time
Employment status characterized by working a minimum number of hours defined by the employer, typically 35-40 hours per week.
Division of Income
The distribution of a company's earnings among various stakeholders, such as dividends for shareholders or reinvestment into the business.
Half Time
A term typically associated with employment or academic status, indicating a work or study load that is half of what is considered full time.
- Become proficient in the allocation of net income or losses across various types of partnership agreements.
Verified Answer
TD
Tracy DeniseJun 13, 2024
Final Answer :
C
Explanation :
Without specific information on how profits will be divided, it's common to assume that partners will share profits equally. This is because both capital contribution and time commitment are valuable to the partnership, and without a specified agreement, an equal division is a fair assumption.
Learning Objectives
- Become proficient in the allocation of net income or losses across various types of partnership agreements.