When Peter Gave Notice to Paul and Mary of Dissolution

question 34

Multiple Choice

When Peter gave notice to Paul and Mary of dissolution of their entertainment partnership business,the capital accounts were as follows:
Peter Paul Mary
$30,000 $50,000 $20,000
The partnership assets were liquidated to $30,000.Outstanding liabilities to third parties totaled $39,000.Distributed to Peter,Paul and Mary each will respectively receive

• A)$20,000; $30,000; $50,000.
• B)$27,000; $47,000; $17,000.
• C)$27,000; $45,000; $18,000.
• D)$30,000; $50,000; $20,000.
• E)$28,500; $41,250; $16,000.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost, indicating how effectively a company controls its materials costs.

Raw Material Purchase

The process of acquiring the basic materials needed for production of goods.

Fixed Manufacturing Overhead

Fixed manufacturing overhead costs are those production expenses that do not vary with the volume of production, such as salaries of managerial staff and rent of the factory.

Budgeted Fixed Manufacturing Overhead

The predetermined amount of fixed overhead expenses expected to be incurred in the manufacturing process.