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Hanson, James, and Smith, a partnership, is in the process of liquidating. The partners have the following capital account balances; $48,000, $48,000, and ($18,000) respectively. The partners share all profits and losses 16%, 48%, and 36%, respectively. Smith has indicated that the ($18,000) deficit will be covered with a forthcoming contribution. The remaining partners have requested an immediate distribution of $40,000 in cash that is available. How should this cash be distributed?   A. Hanson $10,000; James $30,000. B. Hanson $34,000; James $6,000. C. Hanson $22,308; James $17,692. D. Hanson $28,594; James $11,406. E. Hanson $25,000; James $15,000.

Hanson, James, and Smith, a partnership, is in the process of liquidating. The partners have the following capital account balances; $48,000, $48,000, and ($18,000) respectively. The partners share all profits and losses 16%, 48%, and 36%, respectively. Smith has indicated that the ($18,000) deficit will be covered with a forthcoming contribution. The remaining partners have requested an immediate distribution of $40,000 in cash that is available. How should this cash be distributed?   A. Hanson $10,000; James $30,000. B. Hanson $34,000; James $6,000. C. Hanson $22,308; James $17,692. D. Hanson $28,594; James $11,406. E. Hanson $25,000; James $15,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hanson, James, and Smith, a partnership, is in the process of liquidating. The partners have the following capital account balances; $48,000, $48,000, and ($18,000) respectively. The partners share all profits and losses 16%, 48%, and 36%, respectively. Smith has indicated that the ($18,000) deficit will be covered with a forthcoming contribution. The remaining partners have requested an immediate distribution of $40,000 in cash that is available. How should this cash be distributed?

 

A. Hanson $10,000; James $30,000.

B. Hanson $34,000; James $6,000.

C. Hanson $22,308; James $17,692.

D. Hanson $28,594; James $11,406.

E. Hanson $25,000; James $15,000.

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