A partnership has the following balance sheet prior to liquidation (partners’ profit and loss ratios are in parentheses): Cash . . . . . . . . . . . . . . . . . . . . . $ 33,000 Liabilities . . . . . . . . . . . . . . . . . .$50,000Other assets . . . . . . . . . . . . . . 100,000 Playa, capital (40%) . . . . . . . . .24,000Bahia, capital (30%) . . . . . . . . 29,000Arco, capital (30%) . . . . . . . . . 30,000 During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are paid. What amount of cash does each partner receive as a result of this liquidation? Choose the correct.a. Playa, $6,000; Bahia, $4,500; Arco, $4,500. b. Playa, $10,000; Bahia, $18,500; Arco, $19,500.c. Playa, $16,000; Bahia, $23,000; Arco, $24,000.d. Playa, $19,200; Bahia, $14,400; Arco, $14,400.
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 partnership has the following
are in parentheses):
Cash . . . . . . . . . . . . . . . . . . . . . $ 33,000 Liabilities . . . . . . . . . . . . . . . . . .$50,000
Other assets . . . . . . . . . . . . . . 100,000 Playa, capital (40%) . . . . . . . . .24,000
Bahia, capital (30%) . . . . . . . . 29,000
Arco, capital (30%) . . . . . . . . . 30,000
During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are paid. What amount of cash does each partner receive as a result of this liquidation? Choose the correct.
a. Playa, $6,000; Bahia, $4,500; Arco, $4,500.
b. Playa, $10,000; Bahia, $18,500; Arco, $19,500.
c. Playa, $16,000; Bahia, $23,000; Arco, $24,000.
d. Playa, $19,200; Bahia, $14,400; Arco, $14,400.
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