Simonsen,Paulson and Richardson Are Partners in a Firm with the Following

Multiple Choice

Simonsen,Paulson and Richardson are partners in a firm with the following capital account balances: $$\begin{array} { | l | l | } \hline \text { Simonsen } & \$ 50,000 \\\hline \text { Paulson } & 150,000 \\\hline \text { Richardson } & 30,000 \\\hline\end{array}$$ The profit-and-loss-sharing ratio among Simonsen,Paulson and Richardson is 1:3:2,in the order given.Paulson is retiring from the partnership on 31 December 2017.Paulson's capital account is settled at book value.Journalise the cash payment to Paulson upon retirement.

A) $$\begin{array} { | c | l | l | } \hline \text { Paulson, capital } & \$ 150,000 & \\\hline \text { Cash } & & 90,000 \\\hline \text { Simonsen, capital } & & 20,000 \\\hline \begin{array} { c } \text { Richardson, } \\\text { capital }\end{array} & & 40,000 \\\hline\end{array}$$
B) $\begin{array}{|ll|l|l|}\hline\text { Cash } & & \$ 150,000 & \\\hline& \text { Paulson, } & & \\\text { capital }& && 150,000\\\hline\end{array}$
C) $$\begin{array} { | r | l | l | } \hline \text { Paulson, capital } & \$ 150,000 & \\\hline \text { Cash } & & 150,000 \\\hline\end{array}$$
D) $$\begin{array} { | r | l | l | } \hline \text { Paulson, capital } & \$ 150,000 & \\\hline \text { Simonsen, capital } & 50,000 & \\\hline \text { Richardson, capital } & 80,000 & \\\hline \text { Cash } & & 280,000 \\\hline\end{array}$$