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

question 35

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 3:2:1:4.
Based on the preceding information, what amounts will be distributed to Page and Larry upon liquidation of the partnership?

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Marginal Utilities

The added satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Pocket Money

Usually small amounts of money given to children by their parents on a regular basis.

Hard Candies

Small, flavored sugar candies that are solid at room temperature, often sucked rather than chewed.

Marginal Utility

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.