Partners David and Goliath Have Decided to Liquidate Their Business

question 35

Multiple Choice

Partners David and Goliath have decided to liquidate their business.The following information is available:
David and Goliath share profits and losses in a 3:1 ratio,respectively.During the first month of liquidation,half the inventory is sold for $70,000,and $50,000 of the accounts payable are paid.During the second month,the rest of the inventory is sold for $55,000,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.How much cash will be distributed to Goliath at the end of the second month?

• A)$11,250
• B)$13,750
• C)$20,000
• D)$25,000

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Definitions:

Union Shops

Workplaces where employment is conditional upon the worker's membership in the union, typically after a set period has been completed.

National Labor Relations Act

A US law enacted in 1935 that protects the rights of employees and employers, encourages collective bargaining, and curtails certain private sector labor and management practices, which can harm the general welfare.

Better Working Conditions

Improvements in the physical and psychological aspects of the work environment, aimed at enhancing employees' well-being.

Agency Shop

Union security arrangement that requires the payment of union dues but not union membership.