The Balance Sheet of Ryan, James and Peter Firm as on December

question 11

Multiple Choice

The balance sheet of Ryan, James and Peter firm as on December 31, 2014, is given below. Ryan, Peter, and James share profits in the ratio 3:2:1. They have decided to liquidate the partnership with immediate effect. The furniture and the equipment were sold at a cumulative loss of $6,000. The accounts receivable were duly received in cash and the other assets were written off as worthless. The accounts payable and other liabilities were paid off at book value. James argued that he should receive a portion of the remaining cash, but Peter and Ryan argued otherwise. How much cash should James receive or pay?

• A)He should receive $2,500.
• B)He should not receive or pay any money.
• C)He should pay $7,500.
• D)He should pay $500.

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Definitions:

Transactional Leadership

A leadership style focused on the exchange between leaders and followers, where performance is rewarded and non-performance might be punished.

Contingency Approaches

Management theories suggesting that there is no one best way to make decisions; rather, the optimal choice depends on the situation.

Transactional Leadership Approaches

Leadership styles focused on the supervision, organization, and group performance, based on a system of rewards and penalties for achieving specific goals.

Trait Approaches

Trait approaches in psychology propose that individual personalities are composed of broad dispositions, and that these traits influence behavior.