Bill, Page, Larry, and Scott Have Decided to Terminate Their

question 25

Multiple Choice

Bill, Page, Larry, and Scott have decided to terminate their partnership. The partnership's balance sheet at the time they decide to wind up is as follows: During the winding up of the partnership, the other assets are sold for $150,000 and the accounts payable are paid. Page and Larry are personally solvent, but Bill and Scott are personally insolvent. The partners share profits and losses in the ratio of 4:2:1:3.
Based on the preceding information, what amount will be paid out to Bill upon liquidation of the partnership?

• A) $0
• B) $25,000
• C) $11,667
• D) $2,500

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Definitions:

Expansionary Gap

A situation where the real GDP is higher than the potential GDP, often leading to inflationary pressures as demand outstrips supply.

Price Level

The collective median of current prices for goods and services in the economy.

Short-Run Aggregate Supply Curve

A curve that shows the relationship between the price level and the quantity of goods and services that firms are willing and able to supply in the short run.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specific time period.