Kathy, Laura, and Maureen have capital balances of $120,000, $180,000 and $70,000 respectively when Kathy and Laura agree to buy Maureen’s share of the business using partnership assets. The current profit or loss ratio is 4:2:4, respectively. Maureen is paid $70,000. Which statement is FALSE once the transaction has been recorded?
1 answer
The statement that is FALSE once the transaction has been recorded is that the remaining partners' capital balances will be equal.