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: $$\begin{array} { | l | l | } \hline \text { Simonsen } & \$ 40,000 \\\hline \text { Paulson } & 170,000 \\\hline \text { Richardson } & 110,000 \\\hline\end{array}$$ Paulson is retiring from the partnership on 31 December 2017.The profit-and-loss-sharing ratio among Simonsen,Paulson and Richardson is 1:3:2,in the order given.Paulson is paid $110,000 cash in full compensation for her capital account balance.Journalise the cash payment of $110,000 to Paulson upon retirement.

A) $$\begin{array} { | c | l | l | } \hline \text { Paulson, capital } & 170,000 & \\\hline \text { Simonsen, capital } & & 30,000 \\\hline \begin{array} { l } \text { Richardson, } \\\text { capital }\end{array} & & 30,000 \\\hline \text { Cash } && 110,000 \\\hline\end{array}$$
B) $\begin{array}{|ll|l|l|}\hline\text { Cash } & &170,000 & \\\hline& \text { Paulson, } & & \\\text { capital }& && 170,000\\\hline\end{array}$
C) $$\begin{array} { | c | l | l | } \hline \text { Paulson, capital } & 170,000 & \\\hline \text { Cash } & & 110,000 \\\hline \text { Simonsen, capital } & & 20,000 \\\hline \begin{array} { c } \text { Richardson, } \\\text { capital }\end{array} & & 40,000 \\\hline\end{array}$$
D) $$\begin{array} { | r | l | l | } \hline \text { Paulson, capital } & 110,000 & \\\hline \text { Cash } & & 110,000 \\\hline\end{array}$$