Table 12-8 Jimmy, Johnny, and Joey Are Partners in the 3J Company

question 136

Multiple Choice

Table 12-8
Jimmy, Johnny, and Joey are partners in the 3J Company sharing profits and losses equally. Joey has decided to leave the partnership. After all accounts have been updated, the capital balances of the partners are currently $90,000, $120,000, and $70,000, respectively.
-Refer to Table 12-8.Assume Joey takes $50,000 in cash and a promissory note for $20,000.The entry to record his withdrawal includes a:

• A) credit to Joey, Capital for $70,000
• B) debit to Joey, Capital for $50,000
• C) credit to Joey, Capital for $50,000
• D) debit to Joey, Capital for $70,000

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Definitions:

Carrying Costs

Expenses associated with maintaining inventory, including storage, insurance, and opportunity costs.

Cycle Counting

An approach to stock audit where a limited selection of the inventory at a defined site is enumerated on a chosen date.

Service Level

A measure of the performance of a service system, often defined in terms of responsiveness to customer needs and reliability.

Ordering Costs

The expenses associated with the process of requisitioning, purchasing, and receiving goods and services; includes costs of paperwork, communication, and inspections.