The balance sheet of Fox Partnership at Septembe 30, 20XX shows: Various assets

Question

The balance sheet of Fox Partnership at Septembe 30, 20XX shows: Various assets 400,000 Various liabilities 100,000 Capital Thomas 120,000 Capital Renee 90,000 Capital Oscar 60,000 Capital Yvonne 30,000 The partners share income equally. Under a cash distribution plan, how would the fist $150,000 be distributed? (Points : 1) $100,000 to creditors, $50,000 equally among the four partners $100,000 to creditors, $40,000 to Thomas, $10,000 to Renee $100,000 to creditors, $50,000 equally to Thomas and Oscar $100,000 to creditors, $50,000 equally among Thomas, Renee, and Oscar

Explanation / Answer

Under a cash distribution plan, the fist $150,000 would be distributed as:

$100,000 to creditors, $40000 to Thomas, $30000 to Renee, $20000 to Oscar and $10000 to Yvonne.

First creditors are to be paid and the balance cash is to be distributed in the ratio of capital.

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