Rodriguez,Sate,and Melton Are Dissolving Their Partnership

question 94

Multiple Choice

Rodriguez,Sate,and Melton are dissolving their partnership.Their partnership agreement allocates income and losses equally among the partners.The current period's ending capital account balances are Rodriguez,$32,000; Sate,$28,000; and Melton,$(4,000) .After all the assets are sold and liabilities are paid,but before any contributions are considered to cover any deficiencies,there is $56,000 in cash to be distributed.Melton pays $2,000 to cover the deficiency in her account.The final distribution of cash would be as follows:

• A)Rodriquez $30,000 and Sate $26,000.
• B)Rodriquez $32,000 and Sate $26,000.
• C)Rodriquez $30,000 and Sate $28,000.
• D)Rodriquez $30,000 and Sate $27,000.
• E)Rodriquez $31,000 and Sate $27,000.

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Definitions:

Liquid Securities

Financial instruments and assets that can be quickly converted into cash without significantly affecting their market price.

Debt Securities

Financial instruments representing money borrowed that must be repaid, such as bonds, notes, or bills, typically with periodic interest payments.

Stock Securities

Financial instruments that represent ownership shares in a corporation, giving shareholders a claim to part of the company’s assets and earnings.

Consolidated Financial Statements

Combined financial statements of a parent company and its subsidiaries, presenting the financial position and results of operations as a single entity.