A Local Partnership Was in the Process of Liquidating and Reported

question 18

Multiple Choice

A local partnership was in the process of liquidating and reported the following capital balances: Douglass indicated that the $14,000 deficit would be covered by a forthcoming contribution. However, the two remaining partners asked to receive the $31,000 that was then in the cash account.
How much of this money should Justice receive?

• A) $15,467.
• B) $15,533.
• C) $17,333.
• D) $16,533.
• E) $15,867.

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Definitions:

Shareholder

An individual or entity that owns shares in a corporation and has potential financial gains or losses based on the company's performance.

Corporation

A legal entity that is separate and distinct from its owners, possessing rights and responsibilities, capable of conducting business, entering into agreements, and owning property.

Novation

The act of replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party.

Valid Obligation

A legal term denoting a binding duty or commitment that has been established through proper legal or contractual procedures, enforceable by law.