Mack, Harris, and Huss Are Dissolving Their Partnership

question 30

Multiple Choice

Mack, Harris, and Huss are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are Mack, $15,000, Harris, $15,000, Huss, $(2,000) . After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $28,000 in cash to be distributed. Huss pays $2,000 to cover the deficiency in his account. The general journal entry to record the final distribution would be:

• A) Debit Mack, Capital $15,000; debit Harris, Capital $15,000; credit Cash $30,000.
• B) Debit Mack, Capital $14,000; debit Harris, Capital $14,000; credit Cash $28,000.
• C) Debit Mack, Capital $15,000; debit Harris, Capital $15,000; credit Huss, Capital $2,000; credit Cash $28,000.
• D) Debit Cash $28,000; debit Huss, Capital $2,000; credit Mack, Capital $15,000; credit Harris, Capital $15,000.
• E) Debit Mack, Capital $9,334; debit Harris, Capital $9,333; debit Huss, Capital $9,333; credit Cash $28,000.

---

Definitions:

Money Supply

The sum of monetary holdings in an economy, which includes cash, coins, and the balances in checking and saving accounts, at a specific instant.

Standard of Value

A criterion that allows the value of various goods and services to be compared.

Store of Value

A store of value is an asset that maintains its value over time without depreciating, allowing it to be saved, retrieved, and exchanged at a later time.

Medium of Exchange

A mediating tool or mechanism that enables the buying, selling, or exchanging of products among individuals or groups.