Final answer:
The statement is true. After realizing all noncash assets and paying off creditors, the combined capital account balances of Kapp and Lodi ($18,000 - $3,000) are equal to the remaining liability of $15,000 to the creditors.
Step-by-step explanation:
The question pertains to an understanding of how to use a T-account to represent a firm's financial situation. A T-account helps in visualizing the relationship between a firm's assets, liabilities, and net worth. The scenario described involves a liquidation event where Kapp and Lodi LLP realized all noncash assets and paid off creditors, but still owed $15,000 to creditors. At this point, Kapp had a capital account balance of $18,000, while Lodi had a capital account deficit of $3,000. Combining their capital accounts, we get Kapp's $18,000 minus Lodi's $3,000, which equals $15,000. This $15,000 is just enough to cover the remaining liability to creditors, so the statement is true.
In a T-account setup for the firm, we would list on the assets side any remaining cash or assets, and on the liabilities side, the creditors' claim of $15,000 and the net worth, which is the combined capital of Kapp and Lodi. In essence, this is a balance sheet representation where assets equal liabilities plus net worth. To answer the student's question, after adding Kapp's capital balance to Lodi's capital deficit, the firm has $15,000 which matches the amount still owed to creditors, making the statement true.
In this scenario, Kapp & Lodi LLP owed $15,000 to creditors after the realization of noncash assets and the distribution of available cash. If Kapp had a capital account balance of $18,000, and Lodi had a capital account deficit of $3,000, then the statement is true.To determine if the statement is true, we need to calculate the total capital of the company. Total capital is the sum of the individual capital account balances of the partners. In this case, Kapp's capital is $18,000, and Lodi's capital deficit is $3,000. Adding these together, the total capital is $15,000, which matches the amount owed to creditors. Therefore, the statement is true.