The Abrams, Bartle, and Creighton Partnership Began the Process of Liquidation

question 36

Multiple Choice

The Abrams, Bartle, and Creighton partnership began the process of liquidation with the following balance sheet:

Abrams, Bartle, and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $12,000.
After the liquidation expenses of $12,000 were paid and the noncash assets sold, Creighton had a deficit of $8,000. For what amount were the noncash assets sold?

• A) $170,000.
• B) $264,000.
• C) $158,000.
• D) $146,000.
• E) $185,000.

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Definitions:

Fair Value Enterprise Method

A methodology for valuation that estimates the value of an entire enterprise as if it were traded in the market, based on the fair value of its assets and liabilities.

Consolidated Balance Sheet

A financial statement that aggregates the financial position of a parent company and its subsidiaries, presenting them as a single economic entity.

Consolidated Financial Statements

Financial statements that show the financial results of a parent company and its subsidiaries as if they were a single entity.

Non-Wholly Owned Subsidiaries

Subsidiaries in which the parent company owns more than 50% but less than 100% of the subsidiary's voting stock.