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

question 50

Multiple Choice

The balance sheet of Ryan,James and Peter's partnership as of December 31,2018,is given below. $$\begin{array} { | l | r | l | r | } \hline { \text { Assets } } & &{ \text { Liabilities } } & \\\hline \text { Cash } & \$ 18,000 & \text { Accounts Payable } & \$ 15,000 \\\hline \text { Accounts Receivable } & 10,000 & \text { Other liabilities } & 24,000 \\\hline \text { Furniture } & 10,000 & \text { Partners' Equity } & \\\hline \text { Equipment } & 15,000 & \text { Ryan, Capital } &9000\\ \hline \text { Other assets } & 7000 & \text { Peter, Capital } & 10,000 \\\hline& & \text { James, Capital } & 2000 \\\hline \text { Total assets } &\$ 60,000&\text { Total liabilities and partners' equity }&\$ 60,000\\\hline\end{array}$$ Ryan,Peter,and James share profits 3:2:1.They liquidate the partnership.The furniture and equipment
Are sold at a $8000 loss.The accounts receivable were collected in full and the other assets were
Written off as worthless.The liabilities were paid off at book value.James argued that he should
Receive a portion of the remaining cash,but Ryan and Peter disagree.How much cash should James
Receive or pay?

• A) He should receive $1500.
• B) He should not receive or pay any money.
• C) He should pay $55,500.
• D) He should pay $500.

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