Farrah and Davidson had beginning capital balances of $25,000 and $20,000, respectively. The two partners fail to

Question:

Farrah and Davidson had beginning capital balances of $25,000 and $20,000, respectively. The two partners fail to agree on a profit-and-loss ratio. For the first month (June 2012), the lost $6,000.
Requirements
1. How much of this loss goes to Farrah? How much goes to Davidson?
2. The partners withdrew no assets during June. What is each partner’s capital balance at June 30? Prepare a T-account for each partner’s capital.

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...