Gonda, Herron, and Morse Is Considering Possible Liquidation Because Partner

question 4

Multiple Choice

Gonda, Herron, and Morse is considering possible liquidation because partner Morse is personally insolvent.The partners have the following capital account balances: $60,000, $70,000, and $40,000, respectively, and share profits and losses 30%, 45%, and 25%, respectively.The partnership has $200,000 in noncash assets that can be sold for $150,000.The partnership has $10,000 cash on hand, and $40,000 in liabilities.What is the minimum that partner Morse's creditors would receive if they have filed a claim for $50,000?

• A) $ 0.
• B) $27,500.
• C) $45,000.
• D) $47,500.
• E) $50,000.

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Definitions:

Service-Based Economy

An economy where the majority of growth, employment, and production is related to the provision of services rather than the manufacturing of goods.

Class Division

The separation of society into different socioeconomic levels, often leading to distinctions in lifestyle, opportunities, and privileges.

Unequal Rewards

A situation where benefits, compensation, or recognition are distributed unevenly among individuals or groups, often based on social status, gender, or race.

Electronic Cash Registers

These are devices used by retailers to calculate and record sales transactions, manage inventory, and handle cash. They have largely been replaced or augmented by more sophisticated point-of-sale systems.