A partnership currently holds three assets: cash, $10,000; land, $35,000; and a building, $50,000. The partnership has no liabilities. The partners anticipate that expenses required to liquidate their partnership will amount to $5,000. Capital balances are: Ace, capital . . . . . . . . . . . . . . $ 25,000Ball, capital . . . . . . . . . . . . . .. . 28,000Eaton, capital . . . . . . . . . . . . . . 20,000Lake, capital . . . . . . . . . . . . . . . 22,000 The partners share profits and losses as follows: Ace (30 percent), Ball (30 percent), Eaton (20 percent), and Lake (20 percent). If a preliminary distribution of cash is to be made, what is the amount of safe payment that can be made to each partner?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
A
The partnership has no liabilities. The partners anticipate that expenses required to liquidate their partnership will amount to $5,000. Capital balances are:
Ace, capital . . . . . . . . . . . . . . $ 25,000
Ball, capital . . . . . . . . . . . . . .. . 28,000
Eaton, capital . . . . . . . . . . . . . . 20,000
Lake, capital . . . . . . . . . . . . . . . 22,000
The partners share
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