A. The Abrams, Bartle, and Creighton partnership began the process of liquidation with the following balance sheet: Cash $16,00 Non cash Assets $434,000 Liabilities $150,000 Abrams Capital $80,000 Bartle Capital $90,000 Creighton Capital $130,000 Abrams, Bartle, and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $12,000. 1. If the non-cash assets were sold for $234,000, what amount of the loss would have been allocated to Bartle? 2. If the non-cash assets were sold for $134,000, which partner(s) would have had to contribute assets to the partnership to cover a deficit in his/her capital account? 3. After the liquidation expenses of $12,000 were paid and the non-cash assets sold, Creighton had a deficit of $8,000. For what amount were the non-cash assets sold?
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 Abrams, Bartle, and Creighton
following
Cash $16,00
Non cash Assets $434,000
Liabilities $150,000
Abrams Capital $80,000
Bartle Capital $90,000
Creighton Capital $130,000
Abrams, Bartle, and Creighton share
1. If the non-cash assets were sold for $234,000, what amount of the loss would have been allocated to Bartle?
2. If the non-cash assets were sold for $134,000, which partner(s) would have had to contribute assets to the partnership to cover a deficit in his/her capital account?
3. After the liquidation expenses of $12,000 were paid and the non-cash assets sold, Creighton had a deficit of $8,000. For what amount were the non-cash assets sold?
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