McCartney,Harris,and Hussin Are Dissolving Their Partnership

question 84

Multiple Choice

McCartney,Harris,and Hussin are dissolving their partnership.Their partnership agreement allocates each partner 1/3 of all income and losses.The current period's ending capital account balances are McCartney,$13,000; Harris,$13,000; and Hussin,$(2,000) .After all assets are sold and liabilities are paid,there is $24,000 in cash to be distributed.Hussin is unable to pay the deficiency.The journal entry to record the distribution should be:

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Definitions:

Par Value

Par value is the nominal or face value of a bond, share of stock, or a coupon as stated by the issuer.

Stated Value

A per-share amount set by the board of directors for no-par value stock, which is not determined by market forces.

Revaluation Surplus

An increase in the value of an asset held by a company, recognized in equity, that occurs when the asset's current market value exceeds its previously recorded cost.

Share Capital

The total amount of money raised by a company through the sale of shares to investors.