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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bracken, Louden, and Menser, who share profits and losses in a ratio of 3.2.2, respectively are partners in a home decorating business that has not been able to generate the income the partners had hoped for. They have decided to liquidate the business and have sold all assets except for their decorating equipment. All partnership liabilities have been settled and all the partners are personally insolvent. The decorating equipment has a book value of $54,000, and the partners have capital account balances as follows: Bracken, capital Louden, capital Menser, capital Required: Determine the amount of cash each partner will receive as a liquidating distribution if the decorating equipment is sold for the amount stated in each of the following independent cases: (Do not round intermediate calculations.) a. $40,000 Final distribution of cash b. $26,000 Final distribution of cash c. $12,000 Final distribution of cash $34,650 7,150 12,200 $ Bracken Capital Balances Louden Menser 28,650 $ 3,150 $ 8,200 Bracken Bracken Capital Balances Louden Capital Balances Louden 5 Menser Menser 0 $ 0
Transcribed Image Text:Bracken, Louden, and Menser, who share profits and losses in a ratio of 3.2.2, respectively are partners in a home decorating business that has not been able to generate the income the partners had hoped for. They have decided to liquidate the business and have sold all assets except for their decorating equipment. All partnership liabilities have been settled and all the partners are personally insolvent. The decorating equipment has a book value of $54,000, and the partners have capital account balances as follows: Bracken, capital Louden, capital Menser, capital Required: Determine the amount of cash each partner will receive as a liquidating distribution if the decorating equipment is sold for the amount stated in each of the following independent cases: (Do not round intermediate calculations.) a. $40,000 Final distribution of cash b. $26,000 Final distribution of cash c. $12,000 Final distribution of cash $34,650 7,150 12,200 $ Bracken Capital Balances Louden Menser 28,650 $ 3,150 $ 8,200 Bracken Bracken Capital Balances Louden Capital Balances Louden 5 Menser Menser 0 $ 0
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