The partnership agreement for Wilson, Pickett & Nelson, a general partnership, p

Question

The partnership agreement for Wilson, Pickett & Nelson, a general partnership, provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Wilson contributed $85,000, Pickett contributed $51,000 and Nelson contributed $17,000. In the partnership's first year of operation, it incurred a loss of $202,500. What amount of the partnership's loss, rounded to the nearest dollar, should be absorbed by Nelson? Multiple Choice $50,625 $101,250 $0 $67,500 $22,500

Explanation / Answer

Calculate partnership loss allocated to nelson:

Partnership loss allocated to nelson = 202500*17000/153000 = 22500

So answer is e) $22500

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