The VWX partnership is undergoing an installment liquidation. Partners Victoria, Willow, and Xavier share income in a
Question:
The VWX partnership is undergoing an installment liquidation. Partners Victoria, Willow, and Xavier share income in a 3:5:2 ratio. The partnership balance sheet is as follows:
Assets | Liabilities | ||
Cash | $ 7,000 | Accounts payable | $ 20,000 |
Accounts receivable | 10,000 | Loan payable—Willow | 50,000 |
Loan receivable—Victoria | 13,000 | Total liabilities | 70,000 |
Inventory | 25,000 | Capital | |
Buildings and equipment, net | 545,000 | Victoria | 100,000 |
Willow | 250,000 | ||
______ | Xavier | 180,000 | |
Total capital | 530,000 | ||
Total | $600,000 | Total | $600,000 |
You are preparing a cash distribution plan for the partnership.
If $300,000 is available to distribute to the partners, how is it distributed?
A. | $172,600 to Willow and $127,400 to Xavier | |
B. | $6,900 to Victoria, $166,500 to Willow, and $126,600 to Xavier | |
C. | $23,000 to Victoria, $155,000 to Willow, and $122,000 to Xavier | |
D. | $1,400 to Victoria, $157,600 to Willow, and $141,000 to Xavier |
Financial Accounting
ISBN: 978-0133427530
10th edition
Authors: Walter Harrison, Charles Horngren, William Thomas