Olga contributed $10,000 in exchange for a 50% capital interest in OP Partnership. Piotr also contributed $10,000 in exchange for a 50% capital interest in OP Partnership. The partnership agreement states that profits will be allocated 75% to Piotr and 25% to Olga and losses will be allocated 25% to Piotr and 75% to Olga. During the first year, OP Partnership had a loss of $15,000. If OP Partnership were to liquidate after the end of the first year when it has total assets of $5,000, which of the following is/are accurate? Select all that apply. The partnership would split any remaining assets equally among the two partners, with each partner receiving 50% of the assets ($2,500) Piotr would receive 75% of the remaining $5,000 ($3,750) Even though the partnership only has total assets of $5,000, Piotr would need to receive $6,250 upon liquidation of the partnership Olga would receive 25% of the remaining $5,000 ($1,250) Olga would need to contribute $1,250 to the partnership
Olga contributed $10,000 in exchange for a 50% capital interest in OP Partnership. Piotr also contributed $10,000 in exchange for a 50% capital interest in OP Partnership. The partnership agreement states that profits will be allocated 75% to Piotr and 25% to Olga and losses will be allocated 25% to Piotr and 75% to Olga. During the first year, OP Partnership had a loss of $15,000. If OP Partnership were to liquidate after the end of the first year when it has total assets of $5,000, which of the following is/are accurate? Select all that apply. The partnership would split any remaining assets equally among the two partners, with each partner receiving 50% of the assets ($2,500) Piotr would receive 75% of the remaining $5,000 ($3,750) Even though the partnership only has total assets of $5,000, Piotr would need to receive $6,250 upon liquidation of the partnership Olga would receive 25% of the remaining $5,000 ($1,250) Olga would need to contribute $1,250 to the partnership
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 20P
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If OP
Transcribed Image Text:Olga contributed $10,000 in exchange for a 50% capital interest in OP Partnership. Piotr also
contributed $10,000 in exchange for a 50% capital interest in OP Partnership. The partnership
agreement states that profits will be allocated 75% to Piotr and 25% to Olga and losses will be
allocated 25% to Piotr and 75% to Olga.
During the first year, OP Partnership had a loss of $15,000.
If OP Partnership were to liquidate after the end of the first year when it has total assets of $5,000,
which of the following is/are accurate? Select all that apply.
The partnership would split any remaining assets equally among the two partners, with each partner
receiving 50% of the assets ($2,500)
Piotr would receive 75% of the remaining $5,000 ($3,750)
Even though the partnership only has total assets of $5,000, Piotr would need to receive $6,250 upon
liquidation of the partnership
Olga would receive 25% of the remaining $5,000 ($1,250)
Olga would need to contribute $1,250 to the partnership
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