Which One of the Following Statements Is True for a Predistribution

question 8

Multiple Choice

Which one of the following statements is true for a predistribution plan?

• A) The first available $16,000 would go to Newman. The next $12,000 would go $8,000 to Dancey and $4,000 to Newman. The following $32,000 would be shared equally between Dancey, Reese, and Newman. A total distribution of $60,000 would be required before all four partners share any further payments equally.
• B) The first available $16,000 would go to Newman. The next $12,000 would go $8,000 to Dancey and $4,000 to Newman. The following $32,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $60,000 before all four partners share any further payments in their profit and loss sharing ratios.
• C) The first $20,000 would go to Newman. The next $8,000 would go to Dancey. The next $12,000 would be shared equally by Dancey, Reese, and Newman. The total distribution would be $40,000 before all four partners share any further payments equally.
• D) The first available $8,000 would go to Newman. The next $4,000 would be split equally between Dancey and Newman. The following $12,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $24,000 before all four partners share any further payments equally.
• E) The first available $8,000 would go to Newman. The next $4,000 would be split equally between Dancey and Newman. The following $12,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $24,000 before all four partners share any further payments in their profit and loss sharing ratios.

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