S, T and U Are in the Process of Liquidating

question 19

Multiple Choice

S, T and U are in the process of liquidating their partnership.They have the following capital balances and profit and loss percent's:
$$\begin{array} { | l | l | l | } \hline & \text { Capital Balances } & \text { Profit/Loss Percent } \\\hline \mathrm { S } & \$ 10,000 \text { Debit } & 20 \% \\\hline \mathrm { T } & \$ 36,000 \text { Credit } & 50 \% \\\hline \mathrm { U } & \$ 12,000 \text { Credit } & 30 \% \\\hline & & \\\hline\end{array}$$ The balance sheets show cash of $10,000, non-cash assets of $28,000 and no liabilities.
Assuming no liquidation expense what safe payment could be made:

• A)$10,000 to Partners T & U
• B)Partners spilt according to ratio
• C)Partner T gets $10,000 only
• D)Partner T & U each receive $5,000

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Definitions:

Income Taxes Payable

A liability on a company's balance sheet representing the amount of taxes owed to governmental authorities that have not yet been paid.

Net Income

The total profit of a company after subtracting all expenses, including taxes, from its total revenues.

IFRS Categories

Classifications under the International Financial Reporting Standards that dictate the presentation and disclosure of financial information in the financial statements.

Cash Flows

The sum of funds being moved in and out of a company, particularly influencing its ability to meet short-term obligations.