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ladessa [460]
4 years ago
7

Kelly, Lars, and Mona agree to be partners in Neighborhood Delivery Service (NDS), splitting the profits equally. Kelly contribu

tes 67 % of the capital. When NDS is dissolved, its liabilities are greater than its assets. The losses are paid byoptions:1) all of the partners in proportion to their capital contributions2) all of the partners in proportion to their shares of the profits.3) Kelly because she contributed most of the capital.4) Lars and Mona because they contributed the least of the capital.
Business
1 answer:
Vikentia [17]4 years ago
6 0

Answer:

2) all of the partners in proportion to their shares of the profits

Explanation:

Partnership refers to a mutual agreement between two or more individuals, deciding to carry on a business and share it's risks and rewards in the profit sharing ratio as stipulated, or as provided in the partnership deed.

Upon retirement or death of any of the partners, the partnership is said to have been dissolved. Upon dissolution, the profits and losses arising consequently shall be shared by the remaining partners in their profit sharing ratio. A firm may decide to voluntarily dissolve too.

In the given case, upon dissolution, liabilities exceed assets and thus indicate a loss.

This loss shall be borne by all of the partners in their profit sharing ratio and not in the ratio of their capitals.

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Costs of Production

All of the direct and indirect expenses firms incur when producing a good or rendering a service are referred to as production costs. Various expenditures, including labour, raw materials, consumable manufacturing supplies, and general overhead, might be included in production costs. When a company produces a good or offers a service, it incurs production expenses, which are sometimes referred to as product costs. Numerous expenses are included in these costs. For instance, manufacturing expenses for manufacturers include the cost of the labour and raw materials required to make the product. Production expenses in the service sector are related to the labour needed to implement the service and any material costs associated with providing the service.

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