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Duke and L. Duke operated a general partnership performing m

Duke and L. Duke operated a general partnership performing minor automobile repairs in their small rural town for nearly six years. During the past four moths the cousins have noticed a steady decline in customers thanks to the new Wal-Mart that was built about ten miles away that offers one stop shopping for high quality low priced goods while you wait for your tire rotation, brake job, battery replacements, etc. All the Dukes have for their clients to look at is a field and a few festive chickens! As such, this month the Duke's industrious accountant R.P. Coltrane figured that they would have a $6.000 loss. B. Duke's Capital account shows $1,400 and L. Duke's Capital account shows $3,600 but their oral partnership agreement made no mention of how profits/losses would be divided.
How much of the loss will each of the Duke cousins bear?
Answer
A. B. Duke will bear $3,000 and L. Duke will bear $3,000 of the loss
B. B. Duke will bear $4,320 and L. Duke will bear $1,680 of the loss
C. B. Duke will bear $1,680 and L. Duke will bear $4,320 of the loss
D. None of the other answers
E. B. and L. Duke will bear $3,000 and R. P. Coltrane will bear $3,000 of the loss because he should have warned them about what was going to happen in their business if they don't get on the ball.

Solution Preview

The capital contributions = $5,000. This means that Duke owns 28% of the account and the other brother owns 72% of the account. The loss is for $6,000, which means that the first brother will take 1,680 of the loss, and the other brother will take 4,320 of the loss. It would be ...

Solution Summary

The solution discusses the loss that each of the Duke cousins will bear based on the scenario.

$2.19