Lady and Gaga are partners sharing profits and losses in the ratio of 7:3, respectively. On October 1, 2021, they decided to liquidate the business when the account balances are DebitCreditCash50,000 Non-cash Assets150,000 Liabilities 50,000Lady, Capital 90,000Gaga, Capital 60,000During the same month, the non-cash assets were sold for 100,000.After paying the liabilities, Lady and Gaga, in final settlement of their interest, would receive cash ofa. 105,000 and 45,000, respectivelyb. 90,000 and 60,000, respectivelyc. 55,000 and 45,000, respectivelyd. 70,000 and 30,000, respectively

Liquidation in the partnership business means its termination or the end after the mutual decision…

Answered: Lady and Gaga are partners sharing…

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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Lady and Gaga are partners sharing profits and losses in the ratio of 7:3, respectively. On October 1, 2021, they decided to liquidate the business when the account balances are

	Debit	Credit
Cash	50,000
Non-cash Assets	150,000
Liabilities		50,000
Lady, Capital		90,000
Gaga, Capital		60,000

During the same month, the non-cash assets were sold for 100,000.

After paying the liabilities, Lady and Gaga, in final settlement of their interest, would receive cash of

a. 105,000 and 45,000, respectively

b. 90,000 and 60,000, respectively

c. 55,000 and 45,000, respectively

d. 70,000 and 30,000, respectively

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