Compton and Danson form a partnership in which Compton contributes $70,000 in assets and agrees to devote half time to the partnership. Danson contributed $50,000 in assets and agrees to devote full time to the partnership. If no additional information is available, how will Compton and Danson share in the division of income?

Question

Quizplus · Accepted Answer

Since there is no information given regarding any agreement about sharing profits or losses, it can be assumed that the partnership is an equal partnership, where profits and losses are shared equally between the partners. Therefore, Compton and Danson will share equally in the division of income, in a 1:1 ratio.

Compton and Danson Form a Partnership in Which Compton Contributes