After all noncash assets have been converted to cash and all liabilities paid, A, B, and C have capital balances of $10,000
(debit), $5,000
(debit), and $25,000
(credit). The cash available for distribution to the partners is $10,000.

Question

After all noncash assets have been converted to cash and all liabilities paid, A, B, and C have capital balances of $10,000 
(debit), $5,000 
(debit), and $25,000 
(credit). The cash available for distribution to the partners is $10,000.

Quizplus · Accepted Answer

The total capital balance for the partnership is $20,000 in debit and $25,000 in credit, leaving a net credit of $5,000. After paying off all liabilities and converting noncash assets to cash, the partners are left with $10,000. The remaining cash will be distributed based on each partner's capital balance, so A will receive $4,000, B will receive $2,000, and C's credit balance will be reduced to $20,000.

After All Noncash Assets Have Been Converted to Cash and All