Select the best answer for each of the following items:

1. In accordance with the marshaling of assets provision of the Uniform Partnership Act, rank the following liabilities of a partnership in order of payment.

(1)		$20,000 loan from B. Barry who is a partner.
(2)		$30,000 of profits from the last year of operations.
(3)		$3,000 payable to a supplier.
(4)		$100,000 in capital balances of the partners.

4,2,1,3.

2,3,4,1.

3,1,4,2.

3,1,2,4.

2. Personal assets are first allocated to partnership creditors and then to personal creditors.

True if partner has debit balance in his/her capital account.

This statement is true.

This statement is false.

3. The following condensed balance sheet is presented for the partnership of Lisa, Lori, and Lucy, who share profits and losses in the ratio of 5:3:2, respectively:

Cash		$80,000		Liabilities		$140,000
Other Assets		280,000		Lisa, Capital		100,000
				Lori, Capital		100,000
				Lucy, Capital		20,000
Total		$360,000		Total		$360,000

The partners agreed to liquidate the partnership after selling the other assets. If the other assets are sold for $160,000, how much should Lisa receive upon liquidation?

$38,500

$100,000

$40,000

$37,500

4. The following condensed balance sheet is presented for the partnership of Allen, Bob, and Cecil, who share profits and losses in the ratio of 5:3:2, respectively:

Cash		$20,000		Liabilities		$50,000
Other Assets		180,000		Allen, Capital (40%)		37,000
				Bob, Capital (30%)		65,000
				Cecil, Capital (30%)		48,000
		$200,000				$200,000

Figures shown parenthetically reflect agreed profit and loss sharing percentages. If the firm is dissolved and liquidated by selling assets in installments, the first sale of noncash assets having a book value of $90,000 realizes $50,000, and all cash available after settlement with creditors is distributed, the respective partners would receive (to the nearest dollar)

Allen, $0; Bob, $18,500; Cecil, $1,500.

Allen, $0; Bob, $10,000; Cecil, $10,000.

Allen, $8,000; Bob, $6,000; Cecil, $6,000.

Allen, $6,667; Bob, $6,667; Cecil, $6,666.

5. The following condensed balance sheet is presented for the partnership of Allen, Bob, and Cecil, who share profits and losses in the ratio of 5:3:2, respectively:

Cash		$20,000		Liabilities		$50,000
Other Assets		180,000		Allen, Capital (40%)		37,000
				Bob, Capital (30%)		65,000
				Cecil, Capital (30%)		48,000
		$200,000				$200,000

Figures shown parenthetically reflect agreed profit and loss sharing percentages. If the firm is dissolved and liquidated by selling assets in installments, the first sale of noncash assets having a book value of $90,000 realizes $50,000, and $3,000 cash is to be withheld, the respective partners would receive (to the nearest dollar)

Allen, $6,800; Bob, $5,100; Cecil, $5,100.

Allen, $5,667; Bob, $5,667; Cecil, $5,666.

Allen, $0; Bob, $8,500; Cecil, $8,500.

Allen, $0; Bob, $17,000; Cecil, $0.