A Local Partnership Was Considering the Possibility of Liquidation

question 55

Multiple Choice

A local partnership was considering the possibility of liquidation. Capital account balances at that time were as follows. Profits and losses were divided on a 4:2:2:2 basis, respectively. At that time, the partnership held noncash assets reported at $360,000 and liabilities of $120,000. There was no cash on hand at the time.If the assets could be sold for $228,000 and there are no liquidation expenses, what is the amount that Ding would receive from the liquidation?

• A) $36,000.
• B) $0.
• C) $2,500.
• D) $38,720.
• E) $67,250.

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Definitions:

Deflation

A decrease in the general price level of goods and services, often indicating a contraction in the supply of money and credit in an economy.

Crop Prices

The selling price of agricultural products, which can fluctuate based on factors like supply, demand, weather conditions, and government policies.

Debts

Money owed by one party, the debtor, to a second party, the creditor; typically referencing money borrowed to be paid back with interest.

Nominal Interest Rate

The interest rate before adjustments for inflation; the stated or named rate on a loan or financial product.