Partners Dennis and Lilly Have Decided to Liquidate Their Business

question 21

Multiple Choice

Partners Dennis and Lilly have decided to liquidate their business.The following information is available:
Dennis and Lilly share profits and losses in a 3:2 ratio.During the first month of liquidation,half the inventory is sold for $60,000,and $60,000 of the accounts payable is paid.During the second month,the rest of the inventory is sold for $45,000,and the remaining accounts payable are paid.Cash is distributed at the end of each month,and the liquidation is completed at the end of the second month.
-Refer to the information provided above.Using a safe payments schedule,how much cash will be distributed to Dennis at the end of the second month?

• A)$18,000
• B)$27,000
• C)$36,000
• D)$60,000

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Definitions:

Disaffirm

The legal act of rejecting or voiding a contract or agreement, especially used in contexts where one party is not legally competent to enter into a contract.

Contract

A contract is an official agreement among two or more individuals creating reciprocal legal duties that can be upheld in court.

Emancipated

The condition of being freed from legal, social, or political restrictions; commonly referring to a minor legally recognized as capable of acting as an adult.

Age of Majority

The legal age at which an individual is considered an adult and responsible for his or her own actions, varying by jurisdiction.