The Balance Sheet of Ryan and Peter's Partnership as of December

question 90

Multiple Choice

The balance sheet of Ryan and Peter's partnership as of December 31,2018,is given below. $$\begin{array} { | l | r | l | r | } \hline { \text { Assets } } & & { \text { Liabilities } } & \\\hline \text { Cash } & \$ 15,000& \text { Accounts Payable } & \$ 20,000 \\\hline \text { Accounts Receivable } & 12,000& \text { Other liabilities } & 25,000 \\\hline \text { Furniture } & 25,000& \text { Partners' Equity } & \\\hline \text { Equipment } & 40,000 &\text { Ryan, Capital } &30,000\\\hline \text { Other assets } & \underline { 13,000 } &\text { Peter, Capital } & \underline { 30,000 } \\\hline \text { Total assets } & \$ 105,000 & \text { Total liabilities and partners' equity } &\$ 105,000 \\\hline \end{array}$$ Ryan and Peter share profits in the ratio 3:2.They have decided to liquidate the partnership.The accounts payable were settled at $17,000 due to the poor financial condition of the partnership firm.As a result,Ryan's capital account will be credited by ________.

• A) $10,200
• B) $9000
• C) $1800
• D) $3000

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year from the balance sheet date or within the entity's normal operating cycle if longer.

Restructuring Charges

Costs associated with reorganizing a company's structures and operations, often involving layoffs, facility closures, or other significant changes.

Condensed Income Statement

A simplified version of an income statement that shows the main components of net income and revenue in brief.

U.S.GAAP

Generally Accepted Accounting Principles in the United States, a collection of financial reporting standards utilized in the U.S. for accounting purposes.