Rodriguez,Sate,and Melton Are Dissolving Their Partnership

question 125

Multiple Choice

Rodriguez,Sate,and Melton are dissolving their partnership.Their partnership agreement allocates income and losses equally among the partners.The current period's ending capital account balances are Rodriguez,$32,000; Sate,$28,000; and Melton,$(4,000) .After all the assets are sold and liabilities are paid,but before any contributions are considered to cover any deficiencies,there is $56,000 in cash to be distributed.Melton pays $2,000 to cover the deficiency in her account.The final distribution of cash would be as follows:

• A) Rodriquez $30,000 and State $26,000.
• B) Rodriquez $32,000 and State $26,000.
• C) Rodriquez $30,000 and State $28,000.
• D) Rodriquez $30,000 and State $27,000.
• E) Rodriquez $31,000 and State $27,000.

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Definitions:

Utility

A measure of satisfaction or happiness that a consumer derives from the consumption of goods and services.

Engel Curve

Curve relating the quantity of a good consumed to income.

Quantity Consumed

The total amount of a good or service that is used or purchased by consumers within a particular period of time.

Downward-Sloping

Describes a line or curve on a graph that shows a decrease in one variable in response to an increase in another.