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

question 152

Multiple Choice

Simonsen, Paulson, and Richardson are partners in a firm with the following capital account balances: $$\begin{array} { | l | l | } \hline \text { Simonsen } & \$ 50,000 \\\hline \text { Paulson } & 160,000 \\\hline \text { Richardson } & 100,000 \\\hline\end{array}$$ 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 December 31, 2013. Paulson is paid $250,000 cash in full compensation for her capital account balance. Which of the following is true of the journal entry prepared at the time of retirement?

• A) Debit Paulson's capital account by $250,000
• B) Debit Richardson's capital account by $45,000
• C) Debit Simonsen's capital account by $30,000
• D) Debit Income Summary by $90,000

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Definitions:

Traditional Lifestyles

Ways of living that are deeply rooted in historical, cultural, or religious practices and often contrast with modern ways of life.

Dependence Training

Educational practices and societal expectations that encourage compliance and reliance on others within a community or family.

Interdependence Training

A method of teaching or training individuals to depend on each other, promoting teamwork and collaboration skills.

Sibling Child-rearing

The practice where siblings, rather than parents, take primary responsibility for raising children in a family.