The Year-End Balance Sheet and Residual Profit and Loss Sharing

question 15

Multiple Choice

The year-end balance sheet and residual profit and loss sharing percentages for the Gary,Harold,and Ivan partnership on December 31,2011,are as follows: The partners agree to liquidate the business and distribute cash when it becomes available.A cash distribution plan is developed with vulnerability rankings for the Gary,Harold and Ivan partnership.After outside creditors are paid,the cash available will initially go to

• A)Gary in the amount of $20,000.
• B)Harold in the amount of $50,000.
• C)Harold in the amount of $70,000.
• D)Ivan in the amount of $40,000.

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Definitions:

Triangular Model

A theory in psychology, often referring to the Triangular Theory of Love, which describes love in terms of three components: intimacy, passion, and commitment.

Self-Expansion Theory

A psychological theory proposing that individuals have a fundamental motivation to enhance their efficacy through relationships and experiences, leading to personal growth.

Assortative Mating

The idea that people are attracted to others who are similar to them in some kind of social hierarchy.

Equity Theory

The idea that people are motivated to maintain a sense of fairness or equity, whereby both partners feel that the proportion of outcomes (rewards) to inputs (costs) that each receives is roughly equal.