[Fishing Kings] Kyle and Felix Have a Business Called Fishing

question 85

Multiple Choice

[Fishing Kings] Kyle and Felix have a business called Fishing Kings,which escorts tourists on fishing expeditions in Florida.Fishing Kings is doing poorly.Ernesto,a contractor,wants $10,000 for the work he did on Kyle's house.Colin,a tech consultant,wants $7,000 owed to him for setup and purchase of computers in Fishing Kings' office.Kyle sells one of Fishing Kings' boats in order to pay some of the debts.When Felix finds out about the sale,he is furious and yells that Kyle had no right to sell the boat without his permission.Kyle responds that he was acting as an agent of the partnership in selling the boat.
-Which creditor,if any,has priority in Fishing Kings' assets?

• A)Ernesto and Colin have equal priority in the assets of Fishing Kings.
• B)Kyle and Felix.
• C)Ernesto,if he filed his claim first.
• D)Ernesto,because he is a creditor of land.
• E)Colin,because creditors of the partnership have first priority in partnership assets.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, presenting the financial performance over a specific period.

Restated

Adjusting previously reported financial information to correct errors or to reflect more accurate and up-to-date accounting information.

Functional Currency

The main currency used by a business or unit within a company, reflecting the economic environment in which it primarily operates.

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and equity of a parent company and its subsidiaries as one entity.