Question
Bobbi and Stuart are partners. Bobbi's capital balance is $40,000 and Stuart's capital balance is $70,000. Bobbi sells her interest in the partnership to John
Bobbi and Stuart are partners. Bobbi's capital balance is $40,000 and Stuart's capital balance is $70,000. Bobbi sells her interest in the partnership to John for $50,000. The journal entry to record the admission of John as a new partner would include:
A) A credit to John's capital account for $40,000
B) A credit to John's capital account for $50,000
C) A credit to John's capital account for $40,000 and a credit to Stuart's capital account for $10,000
D) A credit to Stuart's capital for $10,000
Based on the following information, calculate return on equity ( round to two decimal places ).
Number of Issued Common Shares#30,000
Number of Issued Preferred Shares#100,000
Profit for the year$76,000
Average Shareholders' Equity for the year$262,300
A) 2.02
B) 0.29
C) 0.50
D) 3.45
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