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Tom, Flick, and Harry are partners in an equipment leasing business that has not been...

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Accounting

Tom, Flick, and Harry are partners in an equipment leasing business that has not been able to generate the type of revenue expected by the partners. They share profits and losses in a ratio of 5:3:2. They have decided to liquidate the business and have sold all the assets except for one piece of heavy machinery. All partnership liabilities have been settled, and all the partners are personally insolvent. The machinery has a book value of $65,000, and the partners have capital account balances as follows: Tom, Capital $ 40,000 Flick, Capital 10,000 Harry, Capital 15,000 Each of the following is an independent case.

Refer to the information given above. What amount of cash will each partner receive as a liquidating distribution if the machinery is sold for $1,100?

Multiple Choice

Tom Flick Harry

A) $ 1,100 $ 0 $ 0

B) $ 8,050 $ 9,170 $ 2,220

C) $ 1,500 $ 0 $ 400

D) $ 1,500 $ 0 $ 0

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