The Henry, Isaac, and Jacobs Partnership Was About to Enter

question 44

Multiple Choice

The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances: Estimated expenses of liquidation were $5,000. Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4. Before liquidating any assets, the partners determined the amount of cash for safe payments and distributed it. The noncash assets were then sold for $120,000. The liquidation expenses of $5,000 were paid. How would the $120,000 be distributed to the partners?
(Hint: Either a predistribution plan or a schedule of safe payments would be appropriate for solving this item.)

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

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Definitions:

Audit Process

A systematic examination of books, accounts, documents, and vouchers of an organization to ascertain how far the financial statements present a true and fair view.

Social Responsibility

The concept of organizations and individuals acting in a manner that considers the long-term impacts of their actions on the environment and society as a whole.

Ethics-Auditing

The process of reviewing and assessing the moral and ethical standards and practices within an organization to ensure compliance and integrity.

Auditing Activity

The systematic examination and evaluation of the financial statements, records, and operations of an organization to ensure accuracy and compliance with established standards.