The Following Account Balances Were Available for the Perry, Quincy

question 53

Multiple Choice

The following account balances were available for the Perry, Quincy, and Renquist partnership just before it entered liquidation: $$\begin{array} { l r l r } \text { Cash } & \$ 90,000 & \text { Liabilities } & \$ 170,000 \\\text { Noncash assets } & 300,000 & \text { Perry, capital } & 70,000 \\& & \text { Quincy, capital } & 50,000 \\& & \text { Renquist, capital } & 100,000 \\\text { Total } & \underline { \$ 390,000 } & \text { Total } & \underline { \$ 390,000 } \\\hline \hline\end{array}$$ Inlcuded in Perry's capital balance is a $20,000 partnership loan owed to Perry. Perry, Quincy, and Renquist shared profits and losses in a ratio of 2:4:4. Liquidation expenses were expected to be $15,000.
All partners were solvent.
-What amount would noncash assets need to be sold for in order for any partner to receive some cash?

• A) $185,000
• B) $170,000
• C) $165,000
• D) $ 95,000
• E) $ 90,000

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Definitions:

Call

An option contract that gives the holder the right to purchase a stock, commodity, or other assets at a specified price within a specific time period.

Intrinsic Value

The fundamental value of a company, stock, currency, or product determined through financial analysis without reference to its market value.

March Put

An options contract giving the holder the right to sell an asset at a specified price before or on a March expiration date.

Underlying Stock

The basic security or asset upon which derivative contracts, such as options and futures, are based.