A partnership has the following account balances: Cash, $84,000; Other Assets, $610,000; Liabilities, $374,000; Nixon (50% of profits and losses), $150,000; Cleveland (30%), $100,000, Pierce (20%), $70,000. The company liquidates, and $15,000 becomes available to the partners. Who gets the $15,000? 4- 5- The partnership of W, X, Y, and Z has the following balance sheet: Cash Other assets $50,000 Liabilities 305,000 W, capital (50% of profits and losses) X, capital (30%) Y, capital (10%) Z, capital (10%) $ 60,000 80,000 105,000 60,000 50,000 Z is personally insolvent, and one of his creditors is considering suing the partnership for the $25,000 that is currently due. The creditor realizes that liquidation could result from this litigation and does not wish to force such an extreme action unless the creditor is reasonably sure of getting the money that is due. If the partnership sells the other assets, how much money must it receive to ensure that $25,000 would be available from Z's portion of the business? Liquidation expenses are expected to be $35,000.
A partnership has the following account balances: Cash, $84,000; Other Assets, $610,000; Liabilities, $374,000; Nixon (50% of profits and losses), $150,000; Cleveland (30%), $100,000, Pierce (20%), $70,000. The company liquidates, and $15,000 becomes available to the partners. Who gets the $15,000? 4- 5- The partnership of W, X, Y, and Z has the following balance sheet: Cash Other assets $50,000 Liabilities 305,000 W, capital (50% of profits and losses) X, capital (30%) Y, capital (10%) Z, capital (10%) $ 60,000 80,000 105,000 60,000 50,000 Z is personally insolvent, and one of his creditors is considering suing the partnership for the $25,000 that is currently due. The creditor realizes that liquidation could result from this litigation and does not wish to force such an extreme action unless the creditor is reasonably sure of getting the money that is due. If the partnership sells the other assets, how much money must it receive to ensure that $25,000 would be available from Z's portion of the business? Liquidation expenses are expected to be $35,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
1
Transcribed Image Text:A partnership has the following account balances: Cash, $84,000; Other Assets, $610,000,
Liabilities, $374,000; Nixon (50% of profits and losses), $150,000; Cleveland (30%), $100,000; Pierce
(20%), $70,000. The company liquidates, and $15,000 becomes available to the partners. Who gets the
$15,000?
4-
5-
The partnership of W, X, Y, and Z has the following balance sheet:
Cash
Other assets
$50,000
305,000
Liabilities
W, capital (50% of profits and losses)
X, capital (30%)
Y, capital (10%)
Z, capital (10%)
$ 60,000
80,000
105,000
60,000
50,000
Z is personally insolvent, and one of his creditors is considering suing the partnership for the $25,000 that
is currently due. The creditor realizes that liquidation could result from this litigation and does not wish to
force such an extreme action unless the creditor is reasonably sure of getting the money that is due. If the
partnership sells the other assets, how much money must it receive to ensure that $25,000 would be
available from Z's portion of the business? Liquidation expenses are expected to be $35,000.
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