Hanson, James, and Smith, a Partnership, Is in the Process

question 33

Multiple Choice

Hanson, James, and Smith, a partnership, is in the process of liquidating. The partners have the following capital account balances; $48,000, $48,000, and ($18,000) respectively. The partners share all profits and losses 16%, 48%, and 36%, respectively. Smith has indicated that the ($18,000) deficit will be covered with a forthcoming contribution. The remaining partners have requested an immediate distribution of $40,000 in cash that is available. How should this cash be distributed?

• A) Hanson $10,000; James $30,000.
• B) Hanson $34,000; James $6,000.
• C) Hanson $22,308; James $17,692.
• D) Hanson $28,594; James $11,406.
• E) Hanson $25,000; James $15,000.

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Definitions:

Special Endorsement

An endorser’s signature accompanying the name of the endorsee.

Endorser

A person who signs the back of a negotiable instrument, such as a check, thereby transferring ownership or guaranteeing its payment.

Endorsement

Official approval or support of an idea, product, or entity, often documented or publicized.

Interpersonal Barrier

Obstacles to effective communication and interaction between individuals, often rooted in misunderstandings, personal biases, or social norms.