Hillary, Bruce, and Cindy Own a Partnership Firm

question 2

Multiple Choice

Hillary, Bruce, and Cindy own a partnership firm. Hillary has an ownership of $25,000; Bruce has an ownership of $40,000; and Cindy has an ownership of $31,000. In the process of liquidation, the partnership sells non-cash assets and registers a gain of $30,000. The profit-loss sharing agreement is 1/6 to Hillary; 2/6 to Bruce; and 3/6 to Cindy. Which of the following is true when a journal entry for the allocation of gain is recorded?

• A)Hillary, Capital is credited for $10,000.
• B)Cindy, Capital is credited for $15,000.
• C)Hillary, Capital is debited for $10,000.
• D)Cindy, Capital is credited for $10,000.

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Definitions:

Degrees of Freedom

A concept in statistics that represents the number of independent values or quantities that can vary in the calculation of a statistic.

T-statistic

A type of statistic used in hypothesis testing, derived from the t-distribution to compare two means or test a correlation.

Sample Size

The quantity of data points or observations gathered in a sample from a population to conduct statistical analysis.

T-statistic

A type of statistic used in hypothesis testing, calculated as the ratio of the departure of the estimated value of a parameter from its hypothesized value to its standard error.