Anne Retires and Is Paid $80,000 Based on the Terms

question 24

Multiple Choice

Anne retires and is paid $80,000 based on the terms of the original partnership agreement.If the bonus method is used, what is the capital of the remaining partners?

• A) Donald, $40,000; Todd, $30,000
• B) Donald, $30,000; Todd, $10,000
• C) Donald, $50,000; Todd, $50,000
• D) Donald, $24,000; Todd, $18,000
• E) Donald, $70,000; Todd, $40,000

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Definitions:

Operating Activities

Transactions and events that pertain to the core business functions of an organization, influencing net income.

Inventory Decrease

A reduction in the quantity of goods held in stock by a company.

Investing Activities

Transactions involving the purchase and sale of long-term assets or investments, part of a company’s cash flow.

Cash Payments

Financial transactions involving the outflow of cash to settle obligations or purchase goods and services.