A Local Partnership Has Assets of Cash of $5,000 and a Building

question 73

Multiple Choice

A local partnership has assets of cash of $5,000 and a building recorded at $80,000. All liabilities have been paid. The partners' capital accounts are as follows Harry $40,000, Landers $30,000 and Waters 15,000. The partners share profits and losses 4:4:2.
If the building is sold for $50,000, how much cash will Waters receive in the final settlement?

• A) $5,000.
• B) $9,000.
• C) $18,000.
• D) $28,000.
• E) $55,000.

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Definitions:

Weighted-Average Method

A cost accounting method that assigns an average cost to each unit of inventory by weighting the costs of similar items.

Work in Process Inventory

The cost of partially finished goods that are still in the production process at the end of an accounting period.

Units Completed

is a measure of the number of finished units produced within a given period, reflecting the productivity or output level.

Process Costing

An accounting methodology used in manufacturing where costs are assigned to processes or departments and then averaged over units produced.