Reference no: EM132891281

On December 31, 2020, the statement of financial position of ABC Partnership with profit or loss ratio of 1:5:4 is presented below:

Cash                       200,000

Outside liabilities       400,000

Other assets            800,000

B, Loan                   10,000

A, Capital             350,000

B, Capital             90,000

C, Capital                150,000

On January 1, 2021, the partners decided to liquidate the ABC Partnership. During January, the following transactions occurred:

1. Other assets with carrying value of ?600,000 has been sold for ?500,000.
2. Liquidation expenses amounting to ?40,000 has been paid during January.
3. ?60,000 cash has been withheld for future liquidation expense.
4. ?300,000 of the outside liabilities has been paid.

Question 1: Who among the partners should be the first to receive cash as it becomes available?

a. A

b. B

c. C

d. None.