Jane, Castle, and Sean Are Dissolving Their Partnership

question 140

Multiple Choice

Jane, Castle, and Sean are dissolving their partnership. Their partnership agreement allocates each partner an equal share of all income and losses. The current period's ending capital account balances are Jane, $54,000; Castle, $42,000; and Sean, $(6,000) . After all assets are sold and liabilities are paid, there is $90,000 in cash to be distributed. Sean is unable to pay the deficiency. The journal entry to record the distribution should be:

• A) Debit Jane, Capital $54,000; debit Castle, Capital $36,000; credit Cash $90,000.
• B) Debit Jane, Capital $54,000; debit Castle, Capital $42,000; credit Cash $96,000.
• C) Debit Jane, Capital $51,000; debit Castle, Capital $39,000; credit Cash $90,000.
• D) Debit Cash $90,000, debit Sean, Capital $6,000, credit Jane, Capital $54,000, credit Castle, Capital $42,000.
• E) Debit Cash $90,000; credit Jane, Capital $30,000; credit Castle, Capital $30,000; credit Sean, Capital $30,000.

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Definitions:

Speedier Development

The practice of accelerating the creation and implementation process of projects or products to reduce time to market.

House of Quality

A matrix used in quality function deployment that visually relates customer desires to the means of achieving those desires, highlighting the relationships between customer requirements and product capabilities.

Medium Relationship

A term not commonly used in a specific academic or professional context, thus considered NO.

Value Assigned

The specific importance, worth, or usefulness attributed to something based on various criteria or standards.