A Local Partnership Has Assets of Cash of $5,000 and a Building

question 1

Multiple Choice

A local partnership has assets of cash of $5,000 and a building recorded at $80,000. All liabilities have been paid. The partners' capital accounts are as follows: Harry $40,000, Landers $30,000 and Waters $15,000. The partners share profits and losses 4:4:2.If the building is sold for $50,000, what amount should Waters receive in the final settlement?

• A) $5,000.
• B) $9,000.
• C) $18,000.
• D) $28,000.
• E) $55,000.

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Definitions:

Plant Expansion

The process of increasing the physical size or production capacity of a manufacturing facility.

Debt Repayments

The process of paying back borrowed money, typically including both the principal amount lent and any accrued interest.

Operating Activities

Activities directly related to the core business functions of producing and delivering goods and services, which influence the cash flow from operations on a company's cash flow statement, highlighted by a secondary explanation emphasizing its financial impact.

Net Income

The amount of revenue that remains after subtracting all expenses, taxes, and costs from total revenue.