Harding, Jones, and Sandy, a Partnership, Is in the Process

question 6

Multiple Choice

Harding, Jones, and Sandy, a partnership, is in the process of liquidating.The partners have the following capital account balances; $24,000, $24,000, and ($9,000) respectively.The partners share all profits and losses 16%, 48%, and 36%, respectively.Sandy has indicated that the ($9,000) deficit will be covered with a forthcoming contribution.The remaining partners have requested an immediate distribution of $20,000 in cash that is available.How should this cash be distributed?

• A) Harding $5,000; Jones $15,000.
• B) Harding $17,000; Jones $3,000.
• C) Harding $11,154; Jones $8,846.
• D) Harding $14,297; Jones $5,703.
• E) Harding $12,500; Jones $7,500.

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Definitions:

Reciprocity Norm

A social norm that expects individuals to help those who have helped them, ensuring mutual aid and cooperation in human societies.

Free Samples

Items given without charge to potential customers to try the product before making a purchase.

Obligated

The state of being legally or morally bound to do something or to follow through on a commitment.

Conciliatory Acts

Behaviors intended to overcome the distrust or hostility of another party, aiming at peace and resolution of conflict.