Ryan and Peter share profits in the ratio 3:2. They have decided to liquidate the partnership. After completing all the liquidation procedures (assuming all assets and liabilities were liquidated at book value), the business is left with $56,000 cash. As a result, Ryan will receive ________.
The balance sheet of Ryan and Peter's partnership as of December 31, 2018, is given below.
A) $26,000
B) $30,000
C) $56,000
D) $36,000
A) $26,000
Upon liquidation, the final cash payment is divided according to the capital balances
outstanding as of that date. (Total assets $96,000 - Total liabilities $40,000 = $56,000)
Remaining cash balance $56,000
Thus, Ryan';s share of cash (Ryan's capital balance) $26,000
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