Gary, Peter, and Chris Own a Firm as Partners

Gary, Peter, and Chris own a firm as partners. Gary has a capital balance of $25,000; Peter a capital balance of $40,000; and Chris has a capital balance of $31,000. As per the partnership agreement, Gary gets a profit share of 2/9; Peter has 4/9; and Chris has 3/9. Which of the following is true, if Gary withdraws from the partnership by receiving $25,000?

A) Peter, Capital and Chris, Capital will be credited for $12,500 each.
B) Gary, Capital will be debited for $25,000.
C) Cash is debited for $25,000.
D) Peter, Capital will be credited for $25,000.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free