Note: This Is a Kaplan CPA Review Question

question 48

Multiple Choice

Note: This is a Kaplan CPA Review Question
The following balance sheet is for the partnership of Able, Bayer, and Cain which shares profits and losses in the ratio of 4:4:2, respectively.
The original partnership was dissolved when its assets, liabilities, and capital were as shown on the above balance sheet and liquidated by selling assets in installments. The first sale of noncash assets having a book value of $90,000 realized $50,000, and all cash available after settlement with creditors was distributed. How much cash should the respective partners receive (to the nearest dollar) ?

• A) Able $0; Bayer $3,000; Cain $17,000.
• B) Able $8,000; Bayer $8,000; Cain $4,000.
• C) Able $6,667; Bayer $6,667; Cain $6,666.
• D) Able $0; Bayer $13,333; Cain $6,667.

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Definitions:

Merchandise

Goods that are bought and sold by a business in the regular course of its operation.

Adjusted Trial Balance

A statement prepared after adjusting entries are made, used to verify the balance of debits and credits before preparing financial statements.

End-of-period Spreadsheet

A tool used in accounting to gather all the financial data and adjustments needed to prepare financial statements at the end of an accounting period.

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjustments have been made for journal entries.