Question

Dancey, Reese, Newman, and Jahn were partners who shared profits and losses on a 4:2:2:2 basis, respectively. They were beginning to liquidate their business. At the start of the process, Capital account balances were as follows:

Dancey, capital $ 72,000
Reese, capital 32,000
Newman, capital 52,000
Jahn, capital 24,000
Which one of the following statements is true for a predistribution plan?
A. The first available $16,000 would go to Newman. The next $12,000 would go $8,000 to Dancey and $4,000 to Newman. The following $32,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $60,000 before all four partners share any further payments equally.B. The first available $16,000 would go to Newman. The next $12,000 would go $8,000 to Dancey and $4,000 to Newman. The following $32,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $60,000 before all four partners share any further payments in their profit and loss sharing ratios.C. The first available $8,000 would go to Newman. The next $4,000 would be split equally between Dancey and Newman. The following $12,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $24,000 before all four partners share any further payments equally.D. The first available $8,000 would go to Newman. The next $4,000 would be split equally between Dancey and Newman. The following $12,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $24,000 before all four partners share any further payments in their profit and loss sharing ratios.E. The first $20,000 would go to Newman. The next $8,000 would go to Dancey. The next $12,000 would be shared by Dancey, Reese, and Newman. The total distribution would be $40,000 before all four partners share any further payments equally.

Answer 1

0

Step-by-step explanation:

-The first available $16,000 would go to Newman. The next $12,000 would go $8,000 to Dancey and $4,000 to Newman. The following $32,000 would be shared by Dancey, Reese and Newman. The total distribution would be $60,000 before all four partners share any further payments in their profit and loss sharing ratios First eliminate lowest value

J = $24,000 - $24,000 = 0

D = $72,000 - $48,000 = $24,000 - $16,000 = $8,000 - $8,000 = 0

R = $32,000 - $24,000 = $8,000 – $8,000 = 0

N = $52,000 - $24,000 = $28,000 – $8,000 = $20,000 – $4,000 = $16,000.