Bonny and Klyde entered into a partnership agreement and contributed the followi
ID: 2396221 • Letter: B
Question
Bonny and Klyde entered into a partnership agreement and contributed the following amounts to the partnership. Bonny gave $65,000 cash to the new startup, and Klyde gave $35,000 cash. The partnership agreement states that income and losses are distributed based on their beginning capital balances.
At the end of the first quarter the company had a net loss of $18,000. Losses are common for new businesses but this one could be directly attributed to Klyde leaving $11,800 worth of inventory on the dock during a thunderstorm, thus ruining the items.
How much of the loss of this first quarter should be allocated to each partner?
Bonny is allocated $9,000; Klyde is allocated $9,000
Bonny is allocated $5,900; Klyde is allocated $5,900
Bonny is allocated $7,670; Klyde is allocated $4,130
Bonny is allocated $11,700; Klyde is allocated $6,300
A.Bonny is allocated $9,000; Klyde is allocated $9,000
B.Bonny is allocated $5,900; Klyde is allocated $5,900
C.Bonny is allocated $7,670; Klyde is allocated $4,130
D.Bonny is allocated $11,700; Klyde is allocated $6,300
Explanation / Answer
Bonny is allocated $11,700; Klyde is allocated $6,300 Allocation: Bony 11700 =18000*65% Klyde 6300 =18000*35% Option d is correct