Duffie and Simpson Have Decided to Liquidate Their Partnership After

question 156

Multiple Choice

Duffie and Simpson have decided to liquidate their partnership after several years of losses. Their partnership agreement states that the partners share in income and losses equally. At the time of liquidation, the capital balances were $78,400 Duffie and $61,600 Simpson. The company has $14,000 cash on hand. Non-cash assets are liquidated for $120,000, with no resulting gain or loss. Liabilities of $76,000 are paid to creditors, with no gain or loss incurred. The amount to be distributed to Simpson upon liquidation is:

• A)$61,600
• B)$58,960
• C)$32,480
• D)$29,000
• E)$25,520

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Definitions:

Operant Conditioning

A learning process where the consequences of an action affect the likelihood of the action being repeated, involving rewards and punishments.

Social Learning

Observational learning that occurs when someone watches others get rewarded or punished for behavior.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response originally elicited by the second stimulus is eventually elicited by the first stimulus alone.

Reciprocal Determinism

The idea that people choose the environments they enter and then change them.