The balance sheet of Ryan and Peter firm as on December 31, 2014, is given below. Ryan and Peter share profits in the ratio 3:2. They have decided to liquidate the partnership with immediate effect. The furniture and the equipment were sold at a cumulative loss of $55,000. The accounts receivable were duly received in cash and the other assets were written off as worthless. The cash balance remaining to pay the liabilities is:

Question

The balance sheet of Ryan and Peter firm as on December 31, 2014, is given below.  Ryan and Peter share profits in the ratio 3:2. They have decided to liquidate the partnership with immediate effect. The furniture and the equipment were sold at a cumulative loss of $55,000. The accounts receivable were duly received in cash and the other assets were written off as worthless. The cash balance remaining to pay the liabilities is:

Quizplus · Accepted Answer

To start, we need to calculate the total assets, liabilities, and capital of the firm:
Total Assets = $150,000 + $230,000 + $70,000 + $350,000 = $800,000
Total Liabilities = $200,000 + $220,000 + $80,000 = $500,000
Total Capital = $800,000 - $500,000 = $300,000

Next, we need to factor in the loss from selling the furniture and equipment: $55,000

The remaining amount to pay the liabilities is the total amount minus the loss:
$800,000 - $55,000 = $745,000
$745,000 - $500,000 = $245,000

Since Ryan and Peter share profits in the ratio 3:2, we need to divide the remaining capital accordingly:
Ryan's share = $245,000 x 3/5 = $147,000
Peter's share = $245,000 x 2/5 = $98,000

However, we also need to factor in the loss from selling the furniture and equipment. This loss reduces the total capital, and therefore the remaining amounts for Ryan and Peter:
Ryan's share = $147,000 - $33,000 = $114,000
Peter's share = $98,000 - $22,000 = $76,000

Finally, we add up the remaining cash balances from the balance sheet:
Cash (Ryan) = $15,000 + $9,000 + $33,000 = $57,000
Cash (Peter) = $23,000 + $19,000 + $22,000 = $64,000

The total cash balance remaining to pay the liabilities is the sum of the remaining cash balances:
$57,000 + $64,000 = $121,000

However, we need to remember that the question asks for the cash balance after paying the accounts receivable. Since the accounts receivable have already been collected, we do not need to factor them into our calculations. Therefore, the correct answer is:

Cash balance remaining to pay the liabilities = $121,000 - $84,000 = $37,000

Therefore, the best choice is C, $37,000.

The Balance Sheet of Ryan and Peter Firm as on December