Use the Following Information to Answer the Question(s) Below

question 15

Multiple Choice

Use the following information to answer the question(s) below.

Quincy has decided to retire from the partnership of Quincy, Robert, and Sam. The partnership will pay Quincy $400,000. Total partnership capital should be revalued based on the excess payment to Quincy. (Assume the book values of the assets listed below equals fair values.) A summary balance sheet for the Quincy, Robert, and Sam partnership appears below. Quincy, Robert, and Sam share profits and losses in a ratio of 1:1:3, respectively.

-What goodwill will be recorded?

• A)$ 80,000
• B)$240,000
• C)$320,000
• D)$400,000

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Definitions:

Par

A value assigned the shares of capital stock and stated on the stock certificate.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in cash or additional shares.

Dividend Per Share

The sum of money paid by a company to its shareholders, divided by the total number of shares outstanding, usually expressed as a dollar amount per share.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with no voting rights but with a fixed dividend.