Simonsen,Paulson and Richardson Are Partners in a Firm with the Following

question 32

Multiple Choice

Simonsen,Paulson and Richardson are partners in a firm with the following capital account balances: $$\begin{array} { | l | l | } \hline \text { Simonsen } & \$ 50,000 \\\hline \text { Paulson } & 150,000 \\\hline \text { Richardson } & 30,000 \\\hline\end{array}$$ The profit-and-loss-sharing ratio among Simonsen,Paulson and Richardson is 1:3:2,in the order given.Paulson is retiring from the partnership on 31 December 2017.Paulson's capital account is settled at book value.Journalise the cash payment to Paulson upon retirement.

• A) \[\begin{array} { | c | l | l | }
• \hline \text { Paulson, capital } & \$ 150,000 & \\
• \hline \text { Cash } & & 90,000 \\
• \hline \text { Simonsen, capital } & & 20,000 \\
• \hline \begin{array} { c }
• \text { Richardson, } \\
• \text { capital }
• \end{array} & & 40,000 \\
• \hline
• \end{array}\]
• B) \(\begin{array}{|ll|l|l|}
• \hline\text { Cash } & & \$ 150,000 & \\
• \hline& \text { Paulson, } & & \\
• \text { capital }& && 150,000\\\hline
• \end{array}\)
• C) \[\begin{array} { | r | l | l | }
• \hline \text { Paulson, capital } & \$ 150,000 & \\
• \hline \text { Cash } & & 150,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | r | l | l | }
• \hline \text { Paulson, capital } & \$ 150,000 & \\
• \hline \text { Simonsen, capital } & 50,000 & \\
• \hline \text { Richardson, capital } & 80,000 & \\
• \hline \text { Cash } & & 280,000 \\
• \hline
• \end{array}\]

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