Question
The Keller, Long, and Mason partnership had the following balance sheet just before entering liquidation: Cash $ 115,000 Liabilities $ 45,000 Noncash assets 230,000 Keller,
The Keller, Long, and Mason partnership had the following balance sheet just before entering liquidation: Cash $ 115,000 Liabilities $ 45,000 Noncash assets 230,000 Keller, Capital 100,000 Long, Capital 70,000 Mason, Capital 130,000 Total $ 345,000 Total $ 345,000 Keller, Long, and Mason share profits and losses in a ratio of 2:4:4. The partnership feels confident it will be able to eventually sell the noncash assets and wants to distribute some cash before paying liabilities. Assuming there will be no liquidation expenses, how much would each partner receive of a total $70,000 distribution of cash? Keller Long Mason A) $ 46,667 $ 0 $ 23,333 B) $ 14,000 $ 28,000 $ 28,000
| Cash | $ | 115,000 | Liabilities | $ | 45,000 | |
| Noncash assets | 230,000 | Keller, Capital | 100,000 | |||
| Long, Capital | 70,000 | |||||
| Mason, Capital | 130,000 | |||||
| Total | $ | 345,000 | Total | $ | 345,000 | |
Keller, Long, and Mason share profits and losses in a ratio of 2:4:4. The partnership feels confident it will be able to eventually sell the noncash assets and wants to distribute some cash before paying liabilities. Assuming there will be no liquidation expenses, how much would each partner receive of a total $70,000 distribution of cash? Keller Long Mason A) $ 46,667 $ 0 $ 23,333 B) $ 14,000 $ 28,000 $ 28,000
| Keller | Long | Mason | |||||||
| A) | $ | 46,667 | $ | 0 | $ | 23,333 | |||
| B) | $ | 14,000 | $ | 28,000 | $ | 28,000 | |||
| C) | $ | 30,000 | $ | 13,333 | $ | 26,667 | |||
| D) | $ | 70,000 | $ | 0 | $ | 0 | |||
| E) | $ | 15,000 | $ | 0 | $ | 55,000 | |||
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Financial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
5th Edition
9781118560952, 1118560957, 978-0470239803
