Question

Erica, Joan and Susan form Capital City Real Estate Company as a Wisconsin general partnership in 2013. Erica contributes her expertise and $15,000 while Joan, $35,000 and Susan, $50,000 contribute cash. In 2016, Joan loans an additional $25,000. In 2018 , Joan loans another $50,000. In 2021, Capital owes $240,000 to outside unsecured creditors.

Answer 1

A general partnership is a business structure where partners share profits and liabilities. Erica, Joan, and Susan formed Capital City Real Estate Company as a general partnership, with each partner contributing differently. Joan loaned additional amounts in 2016 and 2018, and the partnership now owes $240,000 to unsecured creditors in 2021.

Step-by-step explanation:

A general partnership is a type of business structure in which two or more individuals agree to share both the profits and the liabilities of the business. In this case, Erica, Joan, and Susan formed Capital City Real Estate Company as a general partnership. Each partner contributed differently to the partnership - Erica contributed her expertise and $15,000, Joan contributed $35,000 in cash, and Susan contributed $50,000 in cash.In 2016, Joan loaned an additional $25,000 to the partnership, and in 2018, she loaned another $50,000. These loans will affect the partners' capital accounts.In 2021, the partnership owes $240,000 to unsecured creditors. The specific impact this has on the partners' capital accounts would depend on the agreement between them.