The Balance Sheet of Ryan and Peter Firm as on December

question 8

Multiple Choice

The balance sheet of Ryan and Peter firm as on December 31, 2014, is given below. $$\begin{array} { | l | r | l | r | } \hline { \text { Assets } } & &{ \text { Liabilities } } & \\\hline \text { Cash } & \$ 15,000 & \text { Accounts Payable } & \$ 15,000 \\\hline \text { Accounts Receivable } & 12,000 & \text { Other liabilities } & 25,000 \\\hline \text { Furniture } & 25,000 & \text { Partner's Equity } & \\\hline \text { Equipment } & 40,000 & \text { Ryan, Capital } & 30,000 \\\hline \text { Other assets } & \underline { 8,000 } & \text { Peter, Capital } & \underline { 30,000 } \\\hline \text { Total assets } & \$ 100,000 & \text { Total liabilities and partner's equity } & \$ 100,000 \\\hline\end{array}$$ Ryan and Peter share profits in the ratio 3:2. They have decided to liquidate the partnership with immediate effect. The accounts payable were settled at $12,000 due to the poor financial condition of the partnership firm. As a result, Ryan's capital account will be credited by:

• A) $7,200.
• B) $9,000.
• C) $1,800.
• D) $3,000.

---

Definitions:

Coffee

A popular beverage made from roasted coffee beans, known for its stimulating effect due to caffeine content.

Underselling

The practice of selling goods or services at a lower price than competitors, potentially to gain market share.

Japanese Markets

Financial and product markets in Japan, encompassing stock exchanges, commodity trading, and consumer goods markets unique to the Japanese economy.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than competitors using the same amount of resources.