Harding, Jones, and Sandy Is in the Process of Liquidating

question 70

Multiple Choice

Harding, Jones, and Sandy is in the process of liquidating and the partners have the following capital balances; $24,000, $24,000, and ($9,000) respectively. The partners share all profits and losses 16%, 48%, and 36%, respectively. Sandy has indicated that the ($9,000) deficit will be covered with a forthcoming contribution. The remaining partners have requested to immediately receive $20,000 in cash that is available. How should this cash be distributed?

• A) Harding $5,000; Jones $15,000.
• B) Harding $17,000; Jones $3,000.
• C) Harding $11,154; Jones $8,846.
• D) Harding $14,297; Jones $5,703.
• E) Harding $12,500; Jones $7,500.

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Definitions:

Departmental Predetermined Overhead Rates

A method of calculating overhead rates for specific departments within a company, rather than using a single overhead rate for the entire organization.

Machine-Hours

A measure of production output or operational time, calculated by the number of hours a machine is run during a specific period.

Markup

A pricing strategy where a seller adds to the cost of the goods to determine the selling price, aimed at ensuring a profit margin above cost.

Selling Prices

The actual amount that a customer pays for a product or service, which can include discounts, promotions, and taxes.