Dancey, Reese, Newman, and Jahn Were Partners Who Shared Profits

question 67

Multiple Choice

Dancey, Reese, Newman, and Jahn were partners who shared profits and losses on a 4:2:2:2 basis, respectively. They were beginning to liquidate their business. At the start of the process, Capital account balances were as follows: Which one of the following statements is true for a predistribution plan?

• A) The first available $16,000 would go to Newman.
• B) The first available $20,000 would go to Dancey.
• C) The first available $8,000 would go to Jahn.
• D) The first available $8,000 would go to Newman.
• E) The first available $4,000 would go to Jahn.

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Definitions:

Money Market Funds

Investment funds that invest in highly liquid, near-term instruments like cash, cash equivalent securities, and high-credit-rating debt-based securities with short maturities.

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefits.

Revenue Sharing

The distribution of a portion of a company's profits to its partners or other stakeholders in a project or venture.

Mutual Funds

Investment ventures supported by shareholder capital, dealing in a wide array of holdings and managed by experts.