The following question is from Wiley Testbank. However, everything I read in CPA Excel states "as noted elsewhere, absent agreement to the contrary, partners equally share profits and losses."
Flynn and Bleeker formed a partnership under the Revised Uniform Limited Partnership Act (RULPA). Flynn is the general partner and puts in a capital contribution of $40,000. Bleeker is the limited partner and puts in a capital contribution of $60,000. They do not discuss a profit-sharing plan. During the first year, the partnership earns $50,000 in profit. How do they split the profits between Flynn and Bleeker respectively?
MCQ
• $20,000 and $30,000 respectively <---- CORRECT ANSWER
• $25,000 to each.
• $50,000 and $0 respectively.
• None of the above.
Then...in another Wiley question I have a different answer:
This answer is correct. The requirement is to identify the method used to allocate profits and losses if there is no provision in the partnership agreement. Profits and losses are shared equally unless the agreement states otherwise.
What gives??!!! So confused and frustrated. Any thoughts or help? Thank you thank you thank you in advance