Question

In their business​ partnership, George has an ownership interest of 56​% and Ben has an ownership interest of 44​%. In the current​year, they purchase equipment for $9,800. In order to finance the equipment​ purchase, George makes a contribution of $6,700 and Ben makes a contribution of $3,100 to the partnership. Based on the information​ provided, which of the following is true regarding the partnership balance​ sheet?
(A) ​George, Capital will increase by $5,488 and​ Ben, Capital will increase by $4,312.
(B) ​George, Capital will increase by $9,800 and​ Ben, Capital will remain unchanged.
(C) Both​ George, Capital and​ Ben, Capital will increase by $9,800.
(D) ​George, Capital will increase by $6,700 and​ Ben, Capital will increase by $3,100.

Answer 1

Answer:

(D) ​George, Capital will increase by $6,700 and​ Ben, Capital will increase by $3,100.

Explanation:

Transaction for the event

Dr.   Equipment (Asset)      9800

Cr.   George (Capital A/c)   6700

Cr.   Ben (Capital A/c)          3100

So.

George, Capital will increase by $6,700 and​ Ben, Capital will increase by $3,100 on the basis of their contribution in the purchase of equipment. So option D is true based on this event.