Masters, Hardy, and Rowen Are Dissolving Their Partnership

question 42

Multiple Choice

Masters, Hardy, and Rowen are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are Masters, $15,000; Hardy, $15,000; Rowen, $30,000. After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $54,000 in cash to be distributed. The general journal entry to record the final distribution would be:

• A) Debit Masters, Capital $13,500; debit Hardy, Capital $13,500; debit Rowen, Capital $27,000; credit Cash $54,000.
• B) Debit Cash $54,000; credit Rowen, Capital $13,500; credit Masters, Capital $13,500; credit Hardy, Capital $27,000.
• C) Debit Masters, Capital $15,000; debit Hardy, Capital $15,000; debit Rowen, Capital $30,000; credit Loss from Liquidation $6000; credit Cash $54,000.
• D) Debit Masters, Capital $15,000; debit Hardy, Capital $15,000; debit Rowen, Capital $30,000; credit Gain from Liquidation $6,000; credit Cash $54,000.
• E) Debit Masters, Capital $13,000; debit Hardy, Capital $13,000; debit Rowen, Capital $28,000; credit Cash $54,000.

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Definitions:

Scatter Diagram

A graph used to illustrate the relationship between two variables by displaying points that each represent an observation.

Graphically Displayed

Graphically Displayed refers to the visual representation of data or statistical information, such as in charts, graphs, or plots, to facilitate understanding.

Scatter Diagram

A graph used to represent the values of two variables for a set of data, showing how much one variable is affected by another.

Positive Relationship

A direct correlation between two variables where as one variable increases, the other also increases.