The Keaton, Lewis, and Meador partnership had the following balance sheet just before entering liquidation:

Keaton, Lewis, and Meador share profits and losses in a ratio of 2:4:4. Noncash assets were sold for $60,000. How much will each partner receive in the liquidation?

Question

The Keaton, Lewis, and Meador partnership had the following balance sheet just before entering liquidation:
 
Keaton, Lewis, and Meador share profits and losses in a ratio of 2:4:4. Noncash assets were sold for $60,000. How much will each partner receive in the liquidation?

Quizplus · Accepted Answer

First, we need to determine the total asset value by adding the noncash asset sale of $60,000 with the current assets of $50,000, which gives us a total asset value of $110,000.
Next, we need to determine the liabilities by subtracting the total asset value from the equity value of $90,000, which gives us liabilities of $20,000.
To calculate the amount each partner will receive, we need to multiply the equity value of $90,000 by each partner's profit and loss ratio, then subtract the total liabilities of $20,000. 
Partner Keaton will receive $18,000, Partner Lewis will receive $36,000, and Partner Meador will receive $36,000. 
Therefore, the correct answer is option C.

The Keaton, Lewis, and Meador Partnership Had the Following Balance