PaulCo,DavidCo,and Ralph form a partnership with cash contributions of $80,000,$50,000 and $30,000,respectively,and agree to share profits and losses in the ratio of their original cash contributions.PaulCo uses a January 31 fiscal year-end,while DavidCo and Ralph use a November 30 and December 31 fiscal year-end,respectively.Since PaulCo is a majority partner,this partnership will use a January 31 year-end.

Question

Quizplus · Accepted Answer

The partnership's fiscal year-end is typically determined by the tax year of the majority interest, but in this case, PaulCo is not a majority partner as it holds only 40% of the total contributions. The partnership would need to choose a fiscal year-end that aligns with the tax regulations or the partners' agreement.

PaulCo,DavidCo,and Ralph Form a Partnership with Cash Contributions of $80,000,$50,000